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Superannuation

Since the creation of the Superannuation Guarantee Contribution (SGC) scheme in 1992 by the Keating Government, superannuation has become one of the key ways Australians save for the future.

The #1 advantage of superannuation is that the earnings of a super fund are concessionally taxed.  What does that mean?  It means that whilst a super fund member is in "accumulation" mode, the earnings in their account are only taxed at 15% rather than at their marginal tax rate.   Capital gains are also concessionally taxed and only 10% of the gain is subject to tax.  For anyone earning more than $37,000 per annum, saving via superannuation provides tax advantages.

Superannuation is also concessionally taxed during retirement.  Where a person is over the age of 60 and has retired (i.e. is in Pension mode), no tax is applicable on the earnings of their superannuation investments or any capital gains.

Whilst there are tax advantages of saving via super, there are also limits on how much you can contribute.  If you are under the age of 50, the maximum you can contribute on a "salary sacrifice" basis is $25,000 per annum.  If you are over 50, the maximum is $50,000 and this includes the SGC contribution of 9% of your salary.

You can also make contributions of $150,000 out of post tax dollars.  In others words, if you have saved up some money that you have already paid tax on, you can make a contribution of up to $150K per annum of that money.  As you get closer to retirement, making personal contributions might be of benefit.  If you want to accelerate your post tax contributions, you can use the 3 year "bring forward" rule and make three years worth of personal contributions (i.e. $450K) in one go.

Super is obviously not simple.  This is why you need to seek advice from a qualified professional about how much you contribute, when you should contribute and how you should invest the money that has been contributed. 

 

 

What's New

2015
Australian
Budget
Seminars

Dates and locations to be
announced early in 2015