What is Superannuation and what’s so super about it?
Effectively, Superannuation is a way to fund your retirement. It’s an investment vehicle and a means of saving for your future. Within your superannuation fund, you can have a portfolio of shares, property, cash and a variety of other investments. Superannuation is appealing because of its lenient tax treatment when you’re working (accumulation phase) as well as when you’ve hit retirement (pension phase).
The notion is backed by the government who have made it mandatory for all Australian employers to pay ‘super’ to their workers – this is what’s known as ‘super guarantee’.
There are many ways to build your super balance and the easiest way is through the super guarantee scheme. For the current financial year (FY16/17), the general super guarantee percentage is 9.5% of normal earnings.
If your total salary is $70,000 inclusive of super than $6,073 (9.5%) of your salary will be contributed into your super fund leaving you with a net salary of $63,927.
In addition to the super guarantee concept, you can choose to make personal contributions. There are various ways to make personal contributions:
- Salary sacrifice
your employer pays part of your salary directly into your super fund instead of your bank account
- Non concessional contributions (NCC)
After-tax income that you deposit into your super fund
- Spouse contributions
Depositing money into your partners super fund may entitle you to a tax offset
One of the most common questions is ‘how much money will I need before I can retire?’
The answer is dependent upon the lifestyle you choose to lead, the age at which you retire, your outgoings, and income producing options i.e. working part-time in retirement etc.
Our experienced team of financial advisers can help you get your super sorted and put you on the right path to financial success. Reach out today by submitting a meeting request or call us to arrange an appointment for your preferred time and date on 02 9328 0876.
Is your super working well for you?
Our experienced team of financial advisers can help you get your super sorted and put you on the right path to financial success. To arrange an appointment call us on 02 9328 0876.