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Get Your Super Fund Working For You

2 Aug 2013 9:07 AM - Joshua Stega, Financial Adviser Sydney

Superannuation is one of the best ways to save for retirement. By investing for the long term in a tax effective environment you can build substantial wealth for your retirement years.

Superannuation or super, is simply a structure that is specifically designed to accumulate and later pay retirement benefits.

  • The maximum tax you may pay on your income is up to 46.5%, whereas the maximum tax rate in super is 15% (see chart below).
  • If you are employed you will receive compulsory superannuation guarantee payments (SG payments) from your employer at the current rate of 9% of your salary. These SG payments must be paid directly into a superannuation fund.
  • Superannuation assets must be held in the super structure until you retire, or meet a condition of release, at which time you will be able to access these savings to fund your retirement.

Which Tax Rate Would You Prefer?

How is Super Invested?

Superannuation monies must be invested in assets for the purposes of growing your balance for retirement. Superannuation money can be invested in a range of different asset classes, such as:

•     Cash;

•     Bonds;

•     Shares;

•     Property;

•     Alternatives.

Cash and bonds, are described as defensive assets because they will tend to be less volatile, but will generally provide the lowest return over the long term. Shares, property and alternatives are described as growth assets and tend to be more volatile, but will generally provide a higher return than defensive assets over the long term.

When saving for retirement, it is important to recognise that your investment time frame is long term. For this reason many experts suggest it is important to invest in an appropriate level of growth assets within a superannuation fund.

Upon approaching retirement, your investment timeframe becomes shorter and your tolerance of fluctuations in the value of your investment capital may become lower. Taking this into account, many investors shift the allocation of their assets towards defensive asset classes ( cash and bonds), opting of a lower return with less volatility.

Next Steps | Dowload Your Free Superannuation eBook

Subjects covered in this ebook:

  • How much super do I need?
  • How do I consolidate my super?
  • Which superannuation fund is best?
  • What about self managed super? 
  • Why do I have insurance in super? 
  • Is a SMSF right for me?

Everything you need to know to start taking control of your superannuation.

Superannuation eBook

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The Wealth Guy | Joshua Stega Financial Adviser Sydney

Joshua Stega, is head of financial advice at JAS Wealth (privately owned financial planning firm in Sydney). He helps successful individuals manage their wealth. He has a Masters in Taxation & Financial Planning, is a Fellow of the Taxation Institute, a SMSF Specialist Advisor and has significant direct investment experience.    Google+     Twitter     LinkedIn     Facebook     Instagram

M.TaxFP, LLB(Hons), B.Bus(Acc), FTI, Adv.DipFP, DipFP, SMSF Specialist