Aside from your family home, your superannuation fund is likely to be your greatest asset as you approach retirement, yet many of us fail to structure our investments within super in a way that is most appropriate to our needs and circumstances. A fund that is poorly structured or inconsistent with your financial goals and objectives could mean that you retire with less money than you had hoped for. It’s important to keep in mind that superannuation is essentially an investment structure - it is not an investment in itself. Superannuation funds enable you to invest in a range of investment options and asset classes that may include shares, property, cash and fixed interest.
Most Australian employers are required to contribute at least 9.5% of your salary into your superannuation fund. This is known as the superannuation guarantee. However this may not provide you with enough money to fund the lifestyle that you want when you retire. The Federal Government provides incentives for Australians to grow their superannuation savings and one way to do this is through salary sacrifice.
Salary sacrificing is when you ask your employer to redirect a portion of your pay as a contribution to your super fund. By 'sacrificing' some of your before-tax salary and putting it into your super fund, your contribution is taxed at the special rate of 15%.
This is also known as a 'concessional contribution' as there are tax concessions associated with this type of contribution.
At Retire on Track we specialise in superannuation planning.
To find out how we can help you please feel welcome to contact us.