Superannuation has been specifically designed and endorsed by the Federal Government as the preferred way to save for your retirement and has added tax benefits that make it particularly attractive.
Why invest in superannuation?
Superannuation can be a tax effective way of building wealth for your retirement. The tax rates imposed on superannuation funds include:
contributions tax at up to 15% for individuals. This increases to 30% for those earning $300,000 or above
- investment income tax at a maximum of 15%
- capital gains tax at a maximum of 15%. If the asset has been owned by the superannuation fund for more than 12 months, the maximum rate of capital gains tax is 10%
- where an income stream is commenced, the tax rate on income and capital gains in the pension account reduce to zero. Pension payments are also tax free for those aged over 60, for pensions paid from a taxed fund. For those between preservation age and 60, pension payments from a taxed source (less any tax free amount) will be taxed at your personal marginal tax rate but receive a 15% tax offset.
These superannuation tax rates are in contrast to your personal marginal tax rate, which could be considerably higher. Your adviser or registered tax agent can provide you with further information in relation to personal tax rates.
When can I access my superannuation?
Superannuation benefits are restricted in that they generally cannot be accessed until the owner reaches their preservation age and has retired or, the owner reaches age 65. Your Preservation age is dependent on your date of birth.
Date of birth Preservation age
- 1 July 1960 – 30 June 1961 56
1 July 1961 – 30 June 1962 57
1 July 1962 – 30 June 1963 58
1 July 1963 – 30 June 1964 59
After 30 June 1964 60
Super is still one of the most-tax effective ways to sustain wealth and generate income in retirement, so it’s important to make the most of it.
We will review your superannuation or SMSF strategy and will create an ongoing personal super plan that will maximise your savings, unlock the profit potential of super as a tax-effective investment vehicle, and help you make informed decisions about restructuring and investing your super for the future.