How to Grow Your Superannuation
Superannuation, or simply “super,” isn’t just a savings plan—it’s your key to secure and fulfilling retirement plans. At LIFE Financial Planners in Perth, we recognise the significance of making informed decisions about your super, and we’re here to guide you every step of the way.
Super Contributions
Super contributions play a significant role in building your retirement savings. There are various types of contributions you can make to your super fund, including employer contributions, voluntary contributions, government co-contributions, spouse contributions, and downsizer contributions:
- 1. Employer Contributions: Your employer is required to contribute a percentage of your earnings into your super account. This compulsory contribution, known as the super guarantee, must be at least 11% (increasing to 11.5% on July 1st 2024) of your ordinary time earnings.
- 2. Additional Voluntary Contributions: Making extra contributions to your super can significantly accelerate its growth. You can contribute additional funds through salary sacrifice arrangements or by making after-tax contributions.
- 3. Government Co-contributions: Eligible individuals making after-tax contributions to their super may qualify for government co-contributions. The government matches a portion of your contributions, providing a valuable boost to your retirement savings.
- 4. Spouse Contributions: If your spouse earns a low income or is not working, you may be eligible to contribute to their super account and claim a tax offset. This can be a tax-effective way to bolster their retirement savings.
- 5. Downsizer Contributions: If you’re aged 65 or older and have owned your home for more than ten years, you may be able to contribute up to $300,000 from the sale of your home into your super. This one-time contribution can enhance your retirement nest egg.
Investment Strategies
Investment strategies involve determining how you allocate your superannuation funds across different asset classes, such as stocks, bonds, property, and cash. The primary goal of an investment strategy is to achieve the optimal balance between risk and return based on your financial goals, risk tolerance, and investment time horizon:
- 1. Asset Allocation: Diversifying your super investments across different asset classes, such as stocks, bonds, and property, can help manage risk and optimise returns over the long term.
- 2. Risk Management: Assessing your risk tolerance and investment time horizon is essential for selecting appropriate investment options within your super fund. If you’re a conservative investor, you may prefer lower-risk options, while oppositely, if you’re an aggressive investor, you may opt for higher-risk, higher-reward investments.
- 3. Regular Review: Monitoring and periodically reviewing your super investment portfolio is essential for ensuring it remains aligned with your financial goals and risk tolerance. Adjustments may be necessary based on changing market conditions or personal circumstances. Regular reviews with a financial planner can provide valuable insights and adjustments to keep your investments on track.
Determining Your Retirement Needs
- 1. Retirement Lifestyle: Consider the lifestyle you envision for your retirement years, including housing, travel, healthcare, and leisure activities. Estimating your expected expenses can help determine how much super you’ll need to support your desired lifestyle.
- 2. Superannuation Gap: Calculate the gap between your projected retirement expenses and your expected super balance. Identifying any shortfall early allows you to implement strategies to bridge the gap, such as increasing contributions or adjusting investment strategies.
- 3. Age Pension Considerations: Factor in any potential Age Pension entitlements when estimating your retirement income. Understanding your eligibility for government benefits can impact your overall retirement planning strategy.
At LIFE Financial Planners, we’re dedicated to helping you take control of your financial future and utilise the full potential of your superannuation benefits. Don’t leave your retirement savings to chance—let us empower you to achieve a secure and prosperous retirement with our expert superannuation advice. Reach out to Marijana or Mei today at (08) 9322 1882 to schedule a consultation at our West Perth office.
Understand Super: How a Perth Financial Planner Can Help You
In Australia, superannuation, or simply “super,” is not just a savings plan—it’s your ticket to a secure and prosperous retirement. At LIFE Financial Planners, we understand the importance of making informed decisions about your super, which is why we’re here to empower you every step of the way.
Understanding Superannuation
Superannuation is a long-term savings plan designed to provide for your retirement. It operates on a simple premise: your employer contributes a percentage of your earnings into your super account, which is then invested by your super fund until you retire. These contributions, along with potential investment earnings, form the basis of your retirement income.
Choosing the Right SuperFund
Superannuation is more than just a savings account; it’s a long-term investment in your future. Your employer contributes a percentage of your earnings into your super account, which is then invested by your super fund until you retire. These contributions, along with potential investment earnings, form the foundation of your retirement income.
Types of Superannuation
In Australia, super funds generally fall into four main categories: retail, industry, public sector, and corporate. Each type of fund has its unique characteristics and target audience:
- Retail Super Funds: Run by banks or investment companies, retail funds offer various investment options and cater to you regardless of industry and background.
- Industry Super Funds: These funds are typically run to benefit members within specific industries, such as healthcare or education. They often offer competitive fees and profit-for-member structures.
- Public Sector Super Funds: Reserved for government employees, public sector funds provide modest investment choices and low fees, with profits reinvested into the fund for the benefit of members.
- Corporate Super Funds: Arranged by employers for their employees, corporate funds vary in structure and offerings. Larger companies may operate with their own funds, while others may opt for retail or industry fund options.
How a Perth Financial Adviser Can Help You
At LIFE Financial Planners, we understand the importance of your recommended superannuation funds—it’s not just another account; it’s your future. With the ever-changing landscape of super in Australia, having experts on your side is crucial. Here’s how we can help:
- 1. Track down your lost super. There is over $18 billion worth of lost super in Australia. Some of it may be yours.
- 2. Choose the right fund for your needs.
- 3. Tailor an investment strategy for you.
- 4. Work out how much you need to contribute to your working life to live the retirement you want.
- 5. Boost your super! We can show you how to make the most of various tax-saving concessions such as salary sacrifice and contribution strategies.
- 6. Use your super to tax effectively provide for you and your family in the event of misfortune.
- 7. Ensure your super goes to the right people at the right time in the event of your passing.
- 8. Stay up to date with legislative changes, so you’re not disadvantaged.
At LIFE Financial Planners, we’re committed to helping you take control of your financial future and grow your superannuation benefits. Don’t leave your retirement savings to chance—let us empower you with the full potential of your super. Together, we’ll create a tailored strategy to ensure your super works its hardest for you, paving the way for a secure and prosperous retirement. Contact Marijana or Mei today at (08) 9322 1882 to schedule a consultation in our West Perth office.
Your Guide to Self Managed Super Funds
A one-size-fits-all approach rarely applies to retirement, and understanding, if a Self-Managed Super Fund (SMSF) is the right choice for you, depends on your individual circumstances, needs and wants for the future. In this guide, we take a look into the world of Self-Managed Super Funds (SMSFs), sharing how they work while our experienced Financial Planner Perth provides clear and supportive insights to help you plan a retirement that works for you.
Understanding SMSFs: A Clear Distinction:
A Self-Managed Super Fund (SMSF) distinguishes itself as a private fund, allowing you to take the reins of your retirement destiny. It stands apart from industry and retail super funds, providing you with the freedom to shape your investment advice and make choices aligned with your unique aspirations.
Benefits of SMSFs:
Choice and Freedom:
SMSFs empower you with a broader spectrum of investment options, allowing you to venture into assets like real property, art, and collectibles. The flexibility to borrow for property investment further expands your horizons.
Control Over Your Destiny:
As a member-trustee, you hold the strings to your retirement investments both during your working years and when you decide to retire. This level of control extends beyond the offerings of traditional super funds.
Tax Benefits:
Enjoy reduced tax rates on investment returns within SMSFs, capped at a maximum of 15%. Post the age of 60, you can enjoy the tax-free status of your received payments, providing a valuable financial advantage.
Scalability:
The ability to bring together up to six members enhances your capacity to access investment opportunities that may elude individual investors. This scale may also contribute to keeping fees at bay, potentially amplifying your investment growth.
Estate Planning Flexibility:
SMSFs offer a unique advantage in estate planning, allowing for flexible distribution of death benefits in accordance with the trust deed and super law.
Considerations on the SMSF Journey:
Responsibility:
Autonomy of power requires significant responsibility. Managing an SMSF is a meticulous process to ensure you are in accord with regulatory compliance, with penalties for non-compliance ranging from fines to potential legal proceedings.
Expertise:
SMSFs are complex, and it is best to rely on someone to help you navigate both financial and investment expertise. Trustees must stay abreast of market changes, ensure a diversified portfolio, and remain vigilant to legislative updates.
Time Commitment:
The administration and management of an SMSF demand time and dedication. While the workload is substantial, many find a sense of purpose and involvement in running their own fund.
Insurance Costs:
It is essential to be aware that SMSFs may entail higher insurance costs compared to public super funds, which negotiate bulk premiums with insurance providers.
Outsourcing Options:
Recognising the demands, trustees can consider outsourcing management to professionals such as investment managers or financial advisers.
Minimum Amount Consideration:
While there is no rigid minimum for setting up an SMSF, costs can escalate based on the fund’s complexity, structure, and associated fees.
Frequently Asked Questions:
Can I Borrow for Property Investment?
Indeed, SMSFs can leverage Limited Recourse Borrowing Arrangements for property investment, unlocking a pathway to diversified portfolios.
Penalties for Non-Compliance:
Understanding the potential consequences of non-compliance is crucial, ranging from the loss of concessional tax treatment to fines and legal ramifications.
Suitability of SMSFs:
SMSFs are not a one-size-fits-all solution. Determining their suitability requires carefully assessing individual circumstances, financial goals, and investment knowledge. Seeking advice from a financial adviser is a prudent step.
Crafting a fulfilling retirement involves understanding the nuances, committing to the responsibilities, and seeking the guidance of SMSF financial planner in Perth who are dedicated to finding the most appropriate retirement strategy for you. Remember, planning the route to retirement is as unique as you are. With informed decision-making and thoughtful planning, your SMSF can become a powerful asset driving you towards the retirement you deserve.
Your Self-Managed Super Fund
While they are vastly rising in popularity, SMSFs are still complicated to implement and maintain, requiring the right planning and expertise. Our team of SPAA Accredited SMSF Specialist Advisers will bring a wealth of experience and skill to ensure that your SMSF requirements are met and upheld from inception to finalisation. For more information, contact us via phone 08 9322 1882 or email admin@lifefinancialplanners.com
PHONE 08 9322 1882