Superannuation

Superannuation is a concessionally taxed structure and long-term savings vehicle designed to build wealth for retirement.

Compulsory superannuation guarantee contributions mean that most clients have a minimum level of super contributions made on their behalf by their employers. We are often asked whether additional contributions should be made to super. Investing in super is a very attractive option given the substantial tax benefits, which are:

  • Amounts contributed to super (within the concessional contributions cap) on a pre-tax basis are taxed up to a maximum rate of 15%, compared to receiving the funds as salary, where tax can be as high as 47%.
  • Once inside the super fund, investment earnings are taxed at a maximum rate of 15%, compared to non-super investments, where tax can be as high as 47%.
  • Capital gains are taxed at 15% which is reduced to 10% if the asset is held for more than 12 months. Capital gains are currently not taxed in retirement income mode.

The compounding effects of these tax benefits mean your super savings may grow faster than non-super alternatives and this can have a positive impact on how long your money will last in retirement. There are further tax benefits once you reach retirement and use your super to start an income stream.

However investing in super is not without it’s pitfalls or traps, which include higher tax if you exceed certain contribution caps as well as restrictions on access. There have been many changes to superannuation over the years which makes keeping up to date with the superannuation laws an increasingly onerous task.

Superannuation is a key element in the Government’s long-term objective of moving retired Australians off dependence on the age pension and increasing the level of national savings. It often forms a critical part in people’s retirement objectives.

We can assist across many areas of super including the following:

  • Review and selection of an appropriate fund
  • Managing contribution levels in light of the non-concessional contribution cap, concessional cap and Division 293 tax
  • Salary sacrifice
  • Personal deductible contributions
  • Co-contribution and low-income concessions
  • Spouse contributions and splitting
  • Rollovers & lost super
  • Withdrawals & preservation
  • Death benefits
  • Divorce
  • Bankruptcy and super protection

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