I earn $80,000 a year in dividends. Should I reinvest, or add it to my super?

July 22, 2026 — 5:08am

You have reached your maximum number of saved items.

Remove items from your saved list to add more.

I am 58 and have a portfolio of blue-chip shares worth about $1.67 million, producing about $80,000 a year in fully franked dividends. I have owned the shares for 20 years, and they have unrealised capital gains of about $1.3 million. All dividends are re-invested. I expect to retire in two years. My salary is about $130,000 including overtime and penalty rates, and with my dividend income, my taxable income is about $205,000 to $210,000 a year. I salary-sacrifice $20,800 into super each year, with employer contributions of about $11,500, bringing me close to the concessional contribution cap. I also pay Division 293 tax.

My super consists of about $715,000 in a government PSS defined benefit scheme and $805,000 in another account, giving me total super of about $1.52 million. With Labor’s capital gains tax changes due to commence on July 1, 2027, I am concerned about the future CGT implications for my share portfolio. Should I continue reinvesting my dividends through DRPs, or would I be better off taking the dividends in cash and making non-concessional contributions to super instead?

There is no doubt the coming changes have introduced a whole new level of complexity for investors with diversified share portfolios. Fortunately, you’ve held your shares for a long time, so the post-2027 treatment of any capital gains should not be too onerous.

As capital gains are added to your taxable income, it makes sense to defer any major sales until after you retire, when your taxable income will be much lower. Meanwhile, if you have capital losses available, consider using them to offset gains and crystallise some gains before June 30, 2027.

I agree you should take future dividends in cash and maximise non-concessional........

© The Sydney Morning Herald