Superannuation & Retirement
Your superannuation is one of the most important parts to your financial future. So you want the best in the business taking care of your finances. Organic Wealth provide superannuation advice to clients across the Barossa Valley.
Why is super so important?
You might think of super as just your employer super contribution that you can’t access. But it’s important to remember – it’s your money, it’s just being held for you until you retire.
The main idea behind superannuation is to help you build a nest egg which you then use to create an income in retirement (or semi-retirement).
Including it as part of your financial plans can be important for a number of reasons:
- The Age Pension may not be enough for a comfortable retirement.
- You may spend over twenty years in retirement and your money will need to last.
- Because super enjoys the benefits of compound interest and a long investment timeframe, it could be your largest asset by the time you retire.
- The government is offering attractive tax incentives.
How tax-effective is super?
For most people, saving through super can be much more tax effective than saving the same amount outside super. Firstly, any contributions your employer makes (up to a certain limit) and any returns on your super are taxed at a maximum of 15%, rather than your personal marginal tax rate outside of superannuation.
Clever super strategies to consider
- Consolidate your super – It’s much easier to keep track of your money if it’s in one account and, you’ll probably pay less in fees.
- Top-up your super savings – The before-tax contributions (also known as concessional contributions) you make, and performance returns you may earn inside super are taxed up to 15%. For many people, saving through super is much more tax effective than saving the same amount outside super.
- Salary Sacrificing – This simply involves agreeing with your employer for some of your pre-tax salary to be paid directly to your super fund, before income tax is deducted. This should reduce the amount of tax you pay.
- Spouse contributions – In many cases one spouse accumulates the lion’s share of the super. Boosting your spouse’s super can reduce your family’s annual tax bill.
- Take a long-term view – Super is generally a long-term investment (i.e. seven years or more). And since you can’t access your money until you retire, you might want to think about using a growth investment strategy.
- Beware of the caps – There are caps on the amount of concessional (before tax) and non-concessional (after tax) contributions you can make each year. Please contact us for more information on concessional and non-concessional caps.
Call Organic Wealth today for advice on how to get more from your superannuation.
