As Financial Advisors, superannuation is one of our most favoured investment assets for wealth accumulators. Why?
- Clients can’t withdraw it all for a holiday or car
- It is continually growing as your employer puts in more money every year
- Legislation is constantly changing to make superannuation more flexible and advantageous for everyone not just the rich
- It is tax free at the end
This combination allows us to build long term investment strategies for our clients to take advantage of changing markets and legislation to help our clients achieve their personal financial goals.
In this ‘Ark Informer’, we will endeavor to explore some superannuation strategies that you can employ to help fund your retirement.
1. Investing your super appropriately – Most people are unaware that they can actually choose where they would like their super to be invested. This includes the product you are invested in (E.g. AMP, First State Super or BT) and also the underlying funds (E.g. Australian Shares, International Shares, Asian Shares). You can also create a blend of different options to find the right portfolio for you. If you are young, you may want to consider investing in more growth assets whereas if you are approaching retirement you may want investments that pay more income are and more conservative. A small change now, can make a large difference later on.
2. Using your super to pay for some personal insurances – This is one of the most underutilised strategies as most people aren’t aware that you can have your superannuation fund your life insurance and even your income protection. Due to the competitive nature of insurance, some super providers are even cheaper than their outside super option.
3. Salary Sacrifice to super – This involves contributing your pre-tax money (your pay before the ATO touches it) into your super so you pay tax at 15% instead of your Marginal Tax Rate. This strategy can potentially reduce your income tax but also increase your super balance for retirement.
4. Start a Self Managed Superannuation Fund (SMSF) – This is the fastest growing area in superannuation and it involves you setting up your own fund and managing it (with the help of a professional). An SMSF provides greater investment selection such as the opportunity to buy direct residential property and leverage but it requires more attention than a retail superannuation fund. If you have more than $200,000 in your super or you and your partner have more than $200,000 you should seriously investigate this option. Please feel free to watch our SMSF concept video here
5. Purchasing a Property with the assistance of Borrowings through your Self Managed Superfunds. Benefits include concessional tax treatments, diversification, leverage, estate planning, borrowing capacity and asset protection. To download our Property and Self Managed Superfund Ebook, please click here
6. If you are over 55 – look at the option of a Transition to Retirement Income Stream. This can be a very effective way to reduce you tax and increase your superannuation balance leading into retirement.
If you would like to know more about superannuation strategies, please feel free to contact us directly on 02 9262 3333 or via the appointment link on the right and one of our specialists will be in contact with you.