Super - 5 min read
Will thinking about retirement put a damper on my present life?
The short answer “Definitely Not”
Retirement may seem unbelievably distant at this point in your life. However, if you can manage to start planning for retirement early, you’ll reap the rewards later.
For most Australians, superannuation remains the go-to investment vehicle because it slowly and steadily builds wealth over time, while concurrently offering attractive tax benefits. In this post, we’ll take a look at superannuation and how you can start using it today to benefit your life down the road.
The government incentivises retirement planning to help Australians save for their futures. These incentives take the form of tax breaks, which the government offers to motivate people to consistently squirrel away a portion of their income for the future. So why is this important?
If recent data is any indicator, retirement can last a long, long time, and you’ll need a reliable source of income. No one knows precisely how long they’ll live or what kinds of health issues they’ll encounter. Fortunately, life expectancy in Australia continues to rise, with women living until they’re 84.6 years and men until they’re 80.4 years, on average.
By the time you retire, who knows what the average lifespan will be? Regardless of how long you live, you can prepare yourself for a long and fruitful life by regularly contributing to your super while you’re young.
In the past, you may have just used your employer’s superannuation program as a default. There’s certainly nothing wrong with this approach. It will do the trick of diverting money from your pay cheque to an investment account. But as you have more definite ideas about how much you want to save for retirement, you might want to consider one of the following kinds of supers.
If you’re into investing and would like to take more control of your retirement fund, a self-managed super fund (SMSF) might be the best choice for you. With an SMSF, your fund will operate under the same general principles as other supers, but you make all the decisions yourself. While this option offers a significant degree of freedom, it also requires increased accountability: fund owners are responsible for compliance and taxation issues. With an expert handling the details, an SMSF can be a powerful retirement planning tool.
Arranged by employers for their staff, corporate superannuation funds generally offer a range of investment options and are easy to use. Without having to take care of contribution transactions, employees can put their retirement savings on autopilot and watch their nest eggs grow while they focus on other priorities.
Industry super funds were originally established to provide for the retirement of workers from a specific industry, which in more recent years have opened their membership to the general public. They generally have less investment options and tend to not have shareholders.
Retail super funds are different to industry superfunds in that these are offered and run by financial institutions. Retail funds may offer a broader investment menu and be more flexible than industry super funds.
Whatever kind of super you choose, get started right away. With time on your side, superannuation serves as a compelling investment vehicle for your future. Talk with your wealth adviser about salary sacrificing to speed up your savings and reduce your tax load. You may be able to put your money to work more efficiently by increasing your super contributions.
Today’s the day to stop procrastinating. We can help you sort out your retirement planning with a custom superannuation solution created just for you. Let’s talk.