What can you do to make Super Successful for you and your family?
You may think retirement is a long way off; but it’s not a decision that should be put off to a later date. To ensure you have enough funds to live well in retirement, you need to start the planning process sooner. Don’t just leave it to chance or luck. You need to understand what it is you need to start doing now in order to ensure you can have the lifestyle you deserve in retirement, and for the rest of your life. A big part of that planning has to do with your “Super.”
Start thinking About Superannuation sooner
Superannuation is something that people used to start thinking about later in life, however we now know that the planning needs to start earlier due to the recently introduced reduction in contribution caps. The laws that govern your super can be difficult to navigate, so you need to gain a solid understanding of these laws to maximise your benefits in the future. Do it now, and you can chart a wise financial course for your lifetime.
How does Super work?
Superannuation is a tax structure. It differs from other tax structures (such as Family Trusts) in that there are different rules around what you can contribute and when you can gain access to your funds. Super enjoys some generous taxation concessions, which can be of real benefit to you when you retire.
There are many ways people can contribute to Super. You can contribute both before and after tax, in a variety of ways:
Before-tax Contributions:
- Superannuation Guarantee Levy – the 9.5% (minimum) of your income that your employer makes to your Super Fund.
- Salary Sacrifice – where you elect to ‘sacrifice’ part of your income to super.
- Personal Deductible Contributions – where you make a cash contribution to your fund and elect to claim a personal tax deduction.
After-tax Contributions are contributions made to your Super whereby you don’t claim a Tax Deduction on funds contributed. Depending on your income, if you make an after-tax contribution, you may be eligible for the Government Co-Contribution.
There are caps on what you can contribute. It is important to understand what these caps are and how they work, as there can be penalties if you exceed the contribution caps.
How is Super invested?
Within your Superannuation fund, you will have different ‘Investment Options’. Standard investment options include Fixed Interest, Property, Australian Shares and Global Shares. It is important that you select an option that best meets your tolerance to risk, and your investment timeframe. This is an area where seeking financial advice can make a real difference to the performance of your super.
How do I gain access to my Super fund?
When you meet a condition of release, most commonly when you reach age 60 and have retired, or reach age 65, you can gain access to your funds. Most commonly, people convert their Superannuation Fund to an Account Based Pension, and take a monthly income stream, which in effect replaces wage or salary income. The minimum pension is a percentage of the fund; dependent upon your age and recalculated on the 30th June each year. Hence the importance of taking the necessary steps along the way to maximise what you have in Super prior to retirement.
Seek Expert Advice on Superannuation
Legislation changes constantly, so it’s important to have someone you can trust who understands the regulations and can guide you along the way to provide for your retirement.
To learn more and to seek guidance on how to maximise your Super, call us today on 08 9322 7029 and make an appointment to meet with one of our expert team members.
