What is Superannuation?
Superannuation is a way to save for your retirement. The money comes from contributions made into your super fund by your employer and, ideally, topped up by your own money. Sometimes the government will add to it through co-contributions too. Your employer must pay 9% of your salary into a super fund. This is called the Superannuation Guarantee and it’s the law. Over the course of your working life, these contributions from your employer add up, or ‘accumulate’. Your super money is also invested by your super fund so it grows over time. When you retire, you will have money to live off – a nest egg.
Super is a lifetime investment that has many benefits.
How Superannuation works
Super covers different forms of contributions, gives you the right to choose a fund, has default fund arrangements, how contributions can be invested, when funds can be withdrawn, pension provisions, defined benefit arrangements and how funds are invested.
Benefits of Superannuation
Benefits include the advantages of long-term savings, satisfying retirement objectives, compound earnings, tax concessions, co-contributions, insurance, labour standards, environmental, social, or ethical considerations in managing investments.
Risks of investing in Superannuation
This section requires statements to the effect that all investments carry risk, risk varies, higher-return assets carry higher short-term risk, future returns may differ from past experience, returns are not guaranteed and losses may occur. There is also the risk that the law may change. A statement must also be included, if applicable, that the superannuation fund trustee,and or, a financial planner, can help provide an understanding of risk, and design an appropriate investment strategy.
How we invest your money
An in-depth analysis of your individual circumstance gets evaluated and from there we are able to generate a professional report of what it is we are set out to achieve for you.
How Superannuation is taxed
This section explains the main taxes in relation to contributions, fund earnings and withdrawals.
There is also advice that a tax file number should be provided, and a warning that there are taxation consequences if the contribution caps are exceeded.
Insurance in your Superannuation
If insurance cover is available, a summary of costs and benefits must include the main types of cover, how to apply, calculating costs, who pays, and whether default cover can be declined or cancelled.
Superannuation vs. Investments
The key difference between investments and superannuation is that superannuation is restricted for use in retirement – so it’s not suitable for saving for pre-retirement goals. We can help you with your short to medium goals without using your superannuation.
After the 2006 budget it is more important than ever to ensure that you understand how the changes in superannuation affect you.
A full picture on the best approach can only be put together with tax implications of contributions, withdrawals, rollovers and the selection of the right retirement income stream.
In addition, Wyse Wealth also has a wealth of experience in Self Managed Superannuation Funds.
Reduce your LifeStyle Costs, Save and Speak with our Superannuation Specialist today!
Call 1300 850 902 today or leave your details below and lets grow your Superannuation!