Finance Battle: HISA vs FHSSS

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In this lineup let's see the difference in FHSSS and HISA.

FHSSS

$10K put into FHSS ends up as $8,500.

Lets assume 4% deeming rate, so you can withdraw =$8,500 x 104% = $8,840.

Now you withdraw with

- MTR 32%: = 8,840 x (100% - 32% + 30%) = $8,663.2

- MTR 39%: = 8,840 x (100% - 39% + 30%) = $8,044.4

- MTR 47%: = 8,840 x (100% - 47% + 30%) = $7,337.2

HISA

$10K income into HISA. Lets assume 5.5% return.

- MTR 32%: = 10,000 x (100 - 32%) x (100% + 5.5% x (100% - 32%)) = $7,054

- MTR 39%: = 10,000 x (100 - 39%) x (100% + 5.5% x (100% - 39%)) = $6,304

- MTR 47%: = 10,000 x (100 - 47%) x (100% + 5.5% x (100% - 47%)) = $5,454


FHSS Relative Improvement Relative to HISA

So how much better if FHSS?

- MTR 32%: = (8,663.2 - 7054) / 7054 = 22.8%

- MTR 39%: = (8,044.4 - 6304) / 6304 = 27.6%

- MTR 47%: = (7,337.2 - 5454) / 5454 = 34.5%

DIV293

If your div293 income excluding super is over $250k then the extra money you put into super will get DIV293. This might not reduce how much you can pull out, but it will impact your effective return.

MTR 47%: = (7,337.2 - 5454 - 1500) / 5454 = 7%

So still more but not by much.

My reading is the withdrawal will not impact div293 as the withdrawal is added then subtracted, I think.

Withdrawl Tax Bracket 

As the withdrawal might push you into the next tax bracket, what does that do you the return? Alternatively you might get there with a higher wage.

TODO


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