Superannuation has differing levels of significance depending on where we are on life’s financial journey. For the person just getting their first job, it may not rate highly on the importance ladder, however, for the retiree it is likely to be at the top of the list. At Strategic Planning Solutions we recognise this difference of perspective and our Strategic Advice approach enables us to tailor our superannuation strategies to suit your current lifestyle requirements.
Once your strategy has been developed, we can then make appropriate recommendations in relation to the type of superannuation fund and underlying investment options to meet your requirements, whether it be to:
- Consolidate your existing funds,
- Retain your current fund,
- Introduce an alternative Master Trust or Wrap Service, or
- Establish your own Self Managed Superfund (SMSF).
Superannuation Benefits include:
- Tax Effective Savings – As a nation, we do not save enough for our retirement. In light of this fact, the Government developed a series of tax breaks centred around Superannuation to encourage us to tax effectively, over the long term, for our retirement. The trade-off is that we can’t get our hands on the cash until we reach our ‘preservation age’ or meet what is termed a ‘condition of release’ (such as total and permanent disability or severe financial hardship). On the other hand, if the Government did not place restrictions on how and when we can access our super funds, most of us would spend it all anyway and have nothing left when we need it to fund our retirement lifestyle!
- Tax Effective Life Insurance – Super can be a tax effective way to own your life insurance as it is a tax deductible expense to your super fund. When compared to paying for your life from your net, or after tax’ income, the savings can be nearly 50%! There are some important things you need to be aware of when structuring your life insurance in this fashion. Issues such as who are eligible to be your beneficiaries and the long-term effect of the premiums on your retirement savings, are important things to consider, however, when approached strategically, the financial benefits can be significant.
- Tax effective income and growth – Income of Superannuation funds is generally taxed at 15% and capital gains are taxed at 10% provided the assets are held by the super fund for at least 1 year.
- Salary Sacrifice – With certain ‘Caps’ or contribution limits, you may make contributions ‘pre tax’ instead of taking the income as ‘taxable’ salary. In this situation you are only liable to pay 15% (contributions) tax as the money goes into your super fund. This could save a 45% taxpayer 30% on every dollar that was ‘sacrificed’.
- Government Co-Contribution – The super co-contribution is a government measure to boost super savings. If you are a low or middle-income earner, you may be able to receive the super co-contribution from the government by making eligible personal superannuation contributions to your fund.
- Reduced income tax in retirement – people who commence a pension from their super fund after the age of 60 are not subject to any tax on the pension income stream. Also, the assets in the pension account are subject to 0% income and capital gains tax rates!
- Asset Protection – Superannuation assets can be protected from creditors in the event of bankruptcy. This can be of particular benefit to business owners.
Please contact us today to arrange a time to meet so we can assist you to take control of your superannuation money so that it may be of benefit to you at retirement and along the way.