Should I contribute to my super?
When you are making an investment for your retirement, superannuation should definitely be considered, however as with any financial decision it depends on your individual circumstances. Super has significant tax advantages but has been designed with the express purpose of retirement and is therefore governed by strict laws that restrict when you can access it.
The tax benefits apply on ‘pre-tax’ contributions, known as ‘concessional’ contributions and on earnings made within your super fund.
- Contributions tax is 15% for people earning less than $300,000 p.a. (this is proposed to change to $250,000 p.a. from 01 July 2017) and 30% for people earning over. This compares to whatever marginal tax rate your pay personally, so if you are on the 34% tax bracket, because you earn less than $80,000, you achieve a 19% tax saving that goes into your retirement savings rather than tax payable to the government.
- When money is in super, all investment earnings are only taxed at between 10 – 15%, compared again to your personal marginal rate.
Having a lump sum big enough to retire on is the number one financial goal we all share and super contributions should always be considered as part of achieving this goal.
Speak to one of our degree qualified advisers about how this relates to you.
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The content of this presentation is intended to be general information only and has been prepared without taking into account any person’s objectives, financial situation or needs. Each person should consider its appropriateness having regard to these matters or obtain relevant professional financial advice before making any financial decisions. Examples are illustrative only. Each person should obtain any relevant professional financial, taxation and social security advice before making any financial decisions.