Superannuation is designed to help individuals provide for their retirement. There are a number of incentives the government has put in place to make superannuation more attractive: super is a low tax environment, withdrawals can be made tax free when certain criteria are met and contributions of up to $550,000 can be made in any given year.
We can help you take control of your super and provide advice on what contributions will best meet your retirement objectives. Contact us today for your no-obligation, free initial appointment.
As specialists in Self Managed Super Funds and Investor Directed Portfolio Services, we can offer true control of your super back to you, whilst providing the necessary guidance to keep you on track.
Anyone under the age of 65 can contribute to superannuation. If you are over 65 you may be able to contribute to superannuation if certain employment criteria are met. There are two broad types of contributions that can be made to super; concessional and non-concessional.
Concessional contributions are contributions that a tax deduction can be claimed for. This includes your compulsory superannuation (currently 9%) paid by your employer and any salary sacrificing you may doing. Self employed people that contribute to super will also be able to make concessional contributions. There is currently a $50,000 contribution cap in place for people under age 50. If you are over 50 you can contribute up to $100,000 for this type of contribution (until 2012).
Non-concessional contributions are not eligible for a tax deduction. If you contribute funds to superannuation with your ‘after tax’ salary these are classified as non-concessional. You are able to contribute up to $450,000 in any three year period. Personal contributions, the government co-contribution and spouse contributions each classify as non-concessional.
Superannuation is designed to provide for your retirement; therefore funds can only be withdrawn from superannuation when you retire after reaching preservation age. Preservation age is currently 55 but this is being increased to age 60. If you were born after 1/07/1960, you should contact your adviser to determine your exact preservation age.
Between the ages of 55 and 65 you need to have retired from work in order to be able to access your superannuation, however once you reach age 65 you will be able to access your super regardless of your work status.
In certain specific circumstances a portion of your super may be released prior to retirement. You will need to contact your adviser to determine if you fit these criteria.
Superannuation has a number of tax advantages that are not available to individuals. The maximum tax rate on super contributions is 15%. Earnings in the super environment are also taxed at a maximum of 15%. Withdrawals from superannuation, after age 60, are tax free, if your super fund is a ‘taxed’ fund.
Additionally, by taking some of your funds as a pension you may receive preferential tax treatment on payments, and all earnings within the pension are tax free within the account. Taxation and superannuation can be quite complicated and varies greatly between individuals, we therefore recommend that you speak to a financial adviser about how this may relate to your situation.
Many people want greater control of their superannuation. There are a number of options available to you to help you take more control of how your funds are invested and how your superannuation is structured. These options range from a basic superannuation account utilising multi-manager investment options, to using an Investor Directed Portfolio Service (IDPS) where you can use more sophisticated options such as sector funds and direct equities, right up to using a Self Managed Superannuation Fund (SMSF) which allows the ultimate in control over structure and investments.An SMSF allows you to take control of every aspect of your superannuation fund. You can invest in assets as diverse as direct shares, commercial and residential investment property, art work or wine (provided strict legislative guidelines are adhered to). You can structure the SMSF to take advantage of estate planning considerations, borrowing to invest and pension options.