Super is The Key
Superannuation is still a very advantageous, tax efficient way of investing for your retirement. As you may be aware, there are two basic types of superannuation investment:
- Placing your funds into an established superannuation fund run by professionals, or
- Operating your own self-managed super fund (SMSF).
Ethica has experience with both of these approaches, but they each have their advantages and disadvantages, so choosing the option that is most appropriate for you will depend on your financial circumstances, your attitude to risk and reward, and what your goals are.
The team at Ethica know super inside and out. Talk to us today by booking a complimentary initial consultation (value $440). Give Ethica a call on (07) 5433 5577 or complete the form below.
Super Contributions - How much and when?
When you contribute to super, the earnings are taxed up to a maximum rate of only 15% and the tax on capital gains is at a maximum of 10%. In comparison, the earnings of investments outside of super are taxed at the investor’s marginal tax rate, which could be as high as 49.0% (including the Medicare levy).
If you are looking to save from your after-tax income, an investment in super will grow more quickly than the same investment outside super due to the lower tax, plus there’s no extra tax paid on the benefit when you retire.
If, like many in your age bracket, you’re able to contribute to your super from your pre-tax salary (sometimes called salary sacrifice), your super contribution will be taxed at 15%, but then the 15% tax on the earnings may still be considerably less than the tax on other investments.
Strategies we consider for your retirement plans include:
- How to accumulate the required funds working within the cap limits that apply to taxable and non taxable contributions;
- Timing your retirement including transition to retirement strategies;
- Super co-contributions; and
- Strategies to maximise your Centrelink entitlements.
- Approximately 8 in 10 Australians aged 65 or more get a full or part government means-tested age pension that is indexed to average weekly earnings and gets paid as long as you live.
- You also get other valuable benefits if you’re eligible for the age pension.
What are my Superannuation options when I retire?
- Your options depend on the rules of your super fund benefits:
- Some funds pay you benefits by way of an income stream or pension.
- Others offer you a lump sum.
- Others still enable you to take a lump sum or pension.
How Ethica Can Help YouBetter Financial Planning is in Our DNA
This is particularly important for those who haven’t yet paid off their mortgage, have other forms of debt and/or dependent family members. Being over 55, insurance can help you protect your last ‘earning years’ to see out your savings and investment plans.
Although you may be nearing the end of your working years, it’s not too late to look at your wealth building options to fund your aspirations. However, without the luxury of years of compounding, your investment decisions are very important.
The Federal Government has made some changes to the aged pension in recent years, with further changes currently on the drawing board. The team at Ethica keeps up to date with the latest requirements for receiving a part or full aged pension, so we can answer your questions.