Superannuation
Why bother?
A comfortable retirement will for most of us be a long process to build up sufficient retirement funds. But what do we mean by “sufficient”?
What we all should know
- That superannuation is a tax advantaged vehicle not a product. The majority of investments available both within and outside superannuation are very similar.
- That non super investments are taxed as additions to your other income. Superannuation earnings are taxed at a maximum of 15%.
- Superannuation is forced saving for retirement, as generally, minimal funds only are available pre retirement.
- That a 9% employer contribution is generally agreed to be insufficient to provide an adequate retirement income for a person starting work today. The CEO of the Financial Planning Association indicates that 12% per annum for 30 years is required to provide a single person with enough to live comfortably in retirement.
- Age Pension provisions may become accessible later than at present. Eg age pension age may be lifted past age 65. Clearly the higher our assets at retirement, the better.
What you already know
- Current Super entitlements and Annual gross remuneration
- Pretax and post tax superannuation contributions
- Employer/your business contributions pa
- Details of any salary packaging
- Living costs required if you retire today
What you should address with an advisor
- Your constantly changing financial position
- The impact of rapidly changing tax law.
- Whether superannuation funds should pass to named beneficiaries/to your estate.
- Why Binding death nominations cannow be challenged.
- Whether the current earning and contribution rates of your superannuation assets will meet your retirement needs.
- Whether the risk tolerance evident in your investments is matched to your needs ?
- Is greater control offered by a Self-Managed super fund appropriate for you? Click for more...
- What will your superannuation holdings grow to at retirement?
- Will this, combined with non superannuation assets, be adequate to fund your retirement needs?
- If not then how do you meet the shortfall?
This list is not exhaustive.