Superannuation – commonly referred to as “Super” is a tax advantaged way of saving for your retirement.
If you are employed in Australia your employer may have to contribute to a superannuation fund for you under a superannuation guarantee system – compulsory super. In addition to compulsory contributions, you can also make your own contributions from your “after tax” income.
To a lot of people super is a portion of their salary that they cannot access and give it very little thought. Considering it’s your money and could play a very important part in your retirement – It may be worthwhile to consider the following:
- Most super funds will allow their member’s some flexibility in deciding how they would like their super savings invested. How your super is invested can have a significant impact on the final balance.
- For most people saving through super can be much more tax effective than saving the same amount outside super.
- If you have worked for more than one employer, you may have more than one super fund. There could be benefits by consolidating your super accounts into one super fund – one super fund means one set of fees. This could be a saving of hundreds of dollars per year and it is also easier to keep track of one fund with much less paperwork.
- Life, TPD and income protection insurance can be owned through a super fund. One of the main considerations for having personal insurance through super is that the premiums are paid using the contributions into the fund (employer contributions) this can help ease your cash flow. If you are considering this option then there are some disadvantages that should be considered, such as the impact on your final balance. In addition some polices may have less benefits and features than those offered outside of superannuation and depending on circumstances and rules at the time tax may be payable on claim proceeds.
If you would like assistance or information on your superannuation and self managed super fund, we recommend you speak with a qualified financial adviser to discuss your options and get advice tailored to your specific circumstances. Contact AMAFA financial advisers today!