Can you save on tax by switching to an electric vehicle?
Jason Featherby may have been off on a well-earned break, but his seat was in safe hands on 6PR this week, with Jovan Svetkovski stepping in to field personal finance questions and unpack updates in the world of tax, retirement and investing.
From EV tax breaks to retirement strategies and the rising price of gold, here’s what you need to know from the segment.
Driving down your tax bill with electric vehicles
If you’ve been eyeing off an electric vehicle (EV), you might be surprised to learn the tax benefits could be just as compelling as the environmental ones.
According to Jovan, if you purchase an EV or plug-in hybrid under the current $90,000 threshold and salary package it via a novated lease through your employer, you could use pre-tax dollars to pay for it. For high-income earners, this can deliver significant savings, especially with insurance and running costs also potentially deductible pre-tax.
The real kicker? Eligible EV’s are exempt from fringe benefits tax, further increasing the appeal. For someone on the top tax rate, buying an $82,000 EV might end up costing closer to $60,000 once all the benefits are accounted for.
Can you retire on $530,000?
A listener from Spearwood asked whether $530,000 in super is enough to retire at 60 if they own their home and have no debts. The answer? It depends entirely on your lifestyle.
With age pension access starting at 67, Jovan suggests that a modest retirement budget of $40,000 to $47,000 per year could be manageable. However, tracking spending and planning for the years between early retirement and pension eligibility is crucial.
Transferring UK pensions to Australia
There were several questions about bringing UK pensions into Australian super – and the bottom line is clear: specialist advice is essential.
Transferring UK super can be complex and expensive. Jovan explained that unless you’re using a QROPS-approved fund or a self-managed super fund, the process may not be worth it for smaller sums. For some, simply withdrawing cash in the UK and transferring it to Australia might be more straightforward.
Paying down your mortgage with super: smart or risky?
Another caller asked about withdrawing super to pay off their mortgage and then salary sacrificing back into super later. While this can be a valid strategy, there are strict limits if you’re still working. In most cases, you can only access 10% per year via a transition to retirement income stream.
The key is to balance your cash flow needs and understand when full super access becomes available – typically at age 65 or when you fully retire.
The gold rush is real: but what’s next?
Finally, gold’s performance has been hard to ignore. In the past year alone, it’s surged by 40%, with prices hitting over $5,000 AUD per ounce.
Jovan’s take? It’s a clear sign that investors are seeking safety amid global uncertainty – but as always, consider your broader investment goals before jumping in.
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Listen to the full 6PR segment here
