One of the most common questions people ask about superannuation is, “How much money will I require for retirement.” If this is of concern to you, please talk to us but you can also do a bit of initial research starting with the Association of Superannuation Funds of Australia (ASFA) or more in particular their Super Guru website.
If you wish to retire comfortably or at least in your best possible financial position, you should be doing everything you can to ensure your super is building effectively whilst you are still working. Here are some things to consider.
Having your super distributed over several accounts means that you attract multiple lots of costly fees which can easily be avoided by consolidating into one account. Pull out last year’s superannuation statements and decide which fund serves you best. Then take some time to consolidate your accounts.
Outstanding super payments
Employers have a legal obligation to pay all employees’ Super Guarantee (SG) payments if they have earned more than $450 in the space of a month. These payments must be paid at least quarterly. If you have not been paid what you are owed by a previous employer, you have effectively missed out on part of your wages and the accumulated interest.
If you feel that this might be the case, go back to your super statements and check that you have been paid your full entitlements. It is now compulsory for employers to report the super contributions they make but this has not always been the case. Therefore you may have to contact previous employers or the ATO.
This is an efficient way to grow your super because it attracts very favourable tax treatment with a flat 15% tax rate. You will need to see if your employer offers salary sacrifice arrangements; many do. (Note: If they do not you can still get the same tax advantage under new rules – See our article) These contributions come out of your pre-tax salary and are on top of your employer SG contribution. The $25K cap applies.
As from 1 July 2017, if your spouse’s income is less than $37,000 per year, you can make an after tax contribution of up to $3,000 on their behalf and receive an 18% tax offset.
If you would like help on any of these options, please call us.