6 April 2009
Work your money
You work hard for your cash. With super, your money can return the favour!
Super lets you accumulate assets in a low-tax environment and provides a virtually unparalleled tax advantage. In other words, you can minimise tax legally. Despite the current financial climate, Australia’s super industry has a 10-year compound annual growth rate of 12% — the highest of the world’s 11 largest pension markets. Plus, because of the principles of compounding interest, even small regular payments into your super can make a difference over the long-term.
Save tax: Co-contributions
Save tax: Salary Sacrifice
Most people start to think about super in their 40’s and 50’s - after they’ve raised the kids and paid off the mortgage. However, did you know that by putting just $100 a week into super starting at age 25, you can accumulate more than $1 million by the age of 65*? Plus, putting money into super using `before tax` dollars (salary sacrifice) can save you up to 31.5% tax! Simple financial moves like these give you maximum bang for your buck.
Calculate your potential savings
Given how important super is to helping you achieve the retirement lifestyle you want, lack of knowledge could literally cost you thousands.
“Superannuation should be something that every school kid understands – how it works and why it is a valuable part of their lives - not just something for their later years when they have some disposable income,” says ASFA director of policy and industry practice Melinda Howes.
Super is an investment vehicle with a long-term focus. To get the best of your super, “be smarter about the way (you) manage (your) super both before and after retirement,” says Howes.
“At least make sure you understand what your super is invested in and, if really necessary, make a change if the strategy isn’t suitable”, SuperRatings chief Jeff Bresnahan advises.
Seek professional advice before you make decisions about investment changes, and take charge of your super. By being properly informed, you can stay in control and keep your super working hard for you.
Call our Member Services team a call on (03) 9911 3222 (or 1300 300 820 for regional members) to ask how you can work your money.
*Assuming uninterrupted work hours, an investment return of 7 per cent (before tax) a year and re-investing the income every month.
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