What is Superannuation?

Superannuation is a tax advantaged place to save and invest for your retirement. Apart from tax deductions available on contributions, earnings are taxed in the fund at a reduced rate of 15 per cent instead of at your marginal tax rate plus the Medicare levy which could be up to 48.5 per cent. Most capital gains in super are also taxed at an effective reduced rate of 10 per cent. Your retirement benefit will also be subject to concessional rates of tax when you retire.

Contributing to Super

You can make personal contributions to super at any time up age to 65. From age 65 to 74 you can contribute if you have worked at least 40 hours in no more than 30 consecutive days in the financial year the contribution is made. From age 75 no contributions can be made.

Your employer will usually be making superannuation contributions on your behalf as a result of the Superannuation Guarantee Charge (SGC). However, the level of this contribution at 9.0% of your salary is unlikely to be sufficient to meet your retirement needs. Most likely, you will need to make additional contributions at some time to boost your retirement benefit.

However, if your employer pays your super, there is generally no tax deduction available for additional personal super contributions. If you are a moderate or high income earner you might consider salary sacrifice in order to make additional contributions to superannuation as it will likely be a tax effective strategy for you depending on your personal circumstances. If you are a low or moderate income earner you may be eligible for a co-contribution from the federal government.

However, a person who is self-employed (or substantially self-employed in that less than 10% of their assessable income and fringe benefits comes from outside employment) is entitled to claim a deduction for personal super contributions. As with employer contributions there is a limit that depends on your age, on the amount you can claim each financial year.

How much Super will I need for my Retirement?

You need to consider the age you want to retire, the income you would like in retirement and how long you might need that income to last. Your focus should also be on where your money is invested. The higher the earnings rate the less you will need to contribute over the long-term. Our Retirement Calculator can help you determine how much money you will need in retirement to achieve the lifestyle you want.

When can I access my Superannuation Benefit?

Normally you will have access to your super (preserved benefit) on retirement from your preservation age (age 55 but it can be up to age 60 if you were born after 30 June 1964). You need to have stopped work if you are under age 65 and to have permanently retired from the workforce if you are under age 60. You will have to wait until age 65 if you are a spouse who has never worked. The more recent introduction of transition to retirement rules mean that you can now have access to your super from preservation age as a non-commutable income stream and continue to work. Special access rules apply to any restricted and unrestricted non-preserved benefits you may have.

How we can help by providing Personal Superannuation Solutions?

Whether you would like to add to your existing superannuation, consolidate a number of benefits in one fund, switch from one fund to another or even manage your own self managed super fund we can assist with effective superannuation solutions to achieve your retirement goals. If you would like more information on superannuation or like to discuss how you can best achieve your retirement goals simply follow this link: Enquiries