Superannuation is a very effective tool for investors to generate returns with a lower tax rate. It could be a very useful way to invest for Aussies wanting passive income.

The main reason it’s so appealing is that superannuation has a lower tax rate compared to many individuals, trusts and companies. I believe the nature of the superannuation structure, and how Aussies access that money in retirement, enable investors to invest for the long-term.

Receiving passive income is one of the rewarding elements of owning ASX shares with how little effort we need to put in for the ongoing dividend payments.

In my opinion, the passive income we receive after tax is a more important figure than the before-tax figure, because that’s what investors get to keep.

Superannuation can have a tax rate as low as 0% in retirement. That’s great. In the accumulation phase, the superannuation 15% tax rate on income is lower than what many individuals or companies may experience.

Every household may have a different tax situation, so I’ll just focus on a specific dividend income target and won’t refer to tax rates from now on.

How much is needed in superannuation for $100,000 of annual passive income?

Receiving $100,000 in dividends each year would be wonderful, in my opinion. I’d love to receive that much, though I’ve got a long way to go to get there.

There are a variety of asset classes that investors can consider for income such as term deposits, bonds, property and shares.

I think that ASX shares are the best choice for passive income, partially thanks to the excellent bonus of franking credits.

The portfolio size required to earn $100,000 depends on the size of the dividend yield.

As an example, a portfolio with a 5% dividend yield would require a $2 million portfolio. If a portfolio had a dividend yield of 6%, it would need a $1.67 million portfolio.

Different dividend yields require different-sized portfolios to reach that $100,000 of passive income from superannuation.

The sorts of ASX dividend shares I’d buy

Within the ASX share space, there are a few different types of dividend options that offer good dividend yields, such as real estate investment trusts (REITs), S&P/ASX 300 Index (ASX: XKO) shares and compelling listed investment companies (LICs).

Some of the businesses I’d consider with a lower-to-medium dividend yield include Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), Wesfarmers Ltd (ASX: WES), Australian Foundation Investment Co Ltd (ASX: AFI) and Telstra Group Ltd (ASX: TLS).

Some of the higher-yielding names I’d consider include WCM Global Growth Ltd (ASX: WQG), Future Generation Global Ltd (ASX: FGG), Future Generation Australia Ltd (ASX: FGX), Centuria Industrial REIT (ASX: CIP) and Dexus Industria REIT (ASX: DXI).

There are even more ASX dividend shares that superannuation investors could consider for passive income, but I think the above names are a useful starting list.

The post How much superannuation is needed to target a $100,000 annual passive income? appeared first on The Motley Fool Australia.

More reading

• How much passive income can I earn off a $50,000 portfolio?
• How much do I need in superannuation to receive $6000 per month in passive income?
• How to build a successful ASX dividend portfolio
• How I’d invest $10,000 in ASX shares for the next decade
• 3 of the best ASX dividend stocks to supplement your superannuation

Motley Fool contributor Tristan Harrison has positions in Future Generation Australia, Future Generation Global, Washington H. Soul Pattinson and Company Limited, and Wcm Global Growth. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited and Wesfarmers. The Motley Fool Australia has positions in and has recommended Telstra Group and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

On Tuesday, the S&P/ASX 200 Index (ASX: XJO) recovered from a poor start to end the day flat at 8,808.5 points.

Will the market be able to push on from this on Wednesday? Here are five things to watch:

ASX 200 to rise

The Australian share market looks set for a good session on Wednesday following a solid night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 45 points higher. In the United States, the Dow Jones rose slightly, the S&P 500 climbed 0.4%, and the Nasdaq stormed 0.9% higher.

Oil prices climb again

ASX 200 energy shares Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have another good day of trade on Wednesday after oil prices pushed higher overnight. According to Bloomberg, the WTI crude oil price is up 2.4% to US$80.02 a barrel and the Brent crude oil price is up 2.8% to US$85.62 a barrel. This was driven by news that the US has launched new strikes on Iran.

Buy Nick Scali shares 

Bell Potter continues to rate Nick Scali Limited (ASX: NCK) shares as a buy. However, the broker has trimmed its price target from $25.00 to $22.00. This still implies potential upside of 40% and a dividend yield of 4%. It said: “With a cautiously optimistic view on the broader Consumer Discretionary sector and looking through to mid-term opportunities, we continue to favour category outperformers such as NCK and see lower risk on margins in manoeuvring revenue growth vs other retailers in our coverage. This sees us sitting ahead of median Consensus in FY27/28e (below in FY26e). We view NCK among the highest quality retailers in our coverage, with a stable market share in ANZ and UK offering sufficient growth levers.”

Gold price rises

ASX 200 gold shares Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) could have a good session on Wednesday after the gold price rebounded overnight. According to CNBC, the gold futures price is up 1.3% to US$4,058.1 an ounce. Traders were bidding gold higher after US inflation came in softer than expected.

Evolution Mining update

Evolution Mining Ltd (ASX: EVN) shares will be on watch on Wednesday when the gold miner releases its fourth-quarter update. When Evolution Mining released its last quarterly update, it revealed that it was on track for a strong result. It said: “On track to deliver FY26 gold production at lower than original cost guidance with March quarter production of 170koz gold and 11kt copper at an All-in Sustaining Cost (AISC) of $2,220/oz.”

The post 5 things to watch on the ASX 200 on Wednesday appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Nick Scali. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Nick Scali Ltd (ASX: NCK) operates as one of the most recognisable companies in the consumer discretionary sector. 

It is one of Australia’s largest furniture retailers competing within the middle to upper end of the Australian furniture market. It also has a growing global presence via its UK entry.

In general, it has been a tough year for consumer discretionary shares. Inflation and high interest rates have impacted consumer spending. 

This has been reflected in the performance of Nick Scali shares, which are down over 30% in 2026. 

However, a new report from Bell Potter has suggested Nick Scali shares may have been oversold, creating a buy-low opportunity. 

Strength into close of FY26 – cautious on FY27

In yesterday’s report, Bell Potter said it expects Nick Scali to finish FY26 strongly.

Recent sales indicators have been positive, giving the broker confidence that the company’s seasonally strong fourth quarter met expectations.

However, Bell Potter is more cautious about FY27 because consumer confidence is weak in both Australia and the UK, especially for big-ticket household purchases like furniture.

The broker expects challenging trading conditions over the next nine months and believes FY27 will be the low point in the retail cycle.

Even so, Bell Potter expects Nick Scali to perform better than the average retailer during this difficult period.

There are also some early signs that improving housing activity in Australia and better industry trends in the UK could support a gradual recovery.

Bell Potter has reduced its FY27 and FY28 earnings forecasts, mainly because it now expects slower sales growth in the UK than previously forecast.

While our FY26e estimates remain unchanged, we apply some conservatism to our forward estimates within our revenue assumptions for NCK’s mid-market brand Plush in Australia and in the UK. Majority of our earnings changes are driven by revenue assumptions in the UK vs our previous assumptions for a sizable ramp-up in average store revenues.

Price target reduced but upside remains 

Based on this guidance, Bell Potter has reduced its price target on Nick Scali shares to $22.00 (previously $25.00). 

It has retained its buy recommendation. 

Despite lowering its target, the broker still forecasts over 36% upside from current levels. 

With a cautiously optimistic view on the broader Consumer Discretionary sector and looking through to mid-term opportunities, we continue to favour category outperformers such as NCK and see lower risk on margins in manoeuvring revenue growth vs other retailers in our coverage. 

This sees us sitting ahead of median Consensus in FY27/28e (below in FY26e). We view NCK among the highest quality retailers in our coverage, with a stable market share in ANZ and UK offering sufficient growth levers.

The post Why Nick Scali shares are set for a 36% rebound: Expert appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Top broker tips 47% upside for this ASX financials stock 
• 2 ASX small-caps with 40% upside
• 1 ASX dividend stock down 37% I’d buy right now
• Is this ASX consumer discretionary stock a buy after jumping 10% yesterday?

Motley Fool contributor Aaron Bell has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Nick Scali. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.