Designed to improve quality of life during retirement, superannuation can contribute massively to your future financial security and make your twilight years far more comfortable. Your super can do a lot more for you, however, if you spend some time getting things lined up. The following four tips will help you get the most out of it:
Boost Your Balance And Reduce Tax
Did you know that by making additional contributions to your super you could reduce your taxable income while also boosting your savings for the future? Funds added to your superannuation on top of the compulsory contributions made by your employer are referred to as voluntary contributions, and they can come with some pretty nice tax perks.
Voluntary contributions can be made before your income is taxed (via salary sacrifice), or after you receive your pay in your bank account. To work out which option is best for you in terms of taxation, we suggest referring to a reliable income tax calculator.
Consolidate Your Accounts
No matter how well managed your superannuation is, if you have multiple accounts, you’re not getting the most out of your retirement savings. Unless you specifically nominate your preferred super provider when starting a new role, your employer will open an account for you with their preferred provider and pay compulsory contributions into that account.
This can lead to you having super here, there, and everywhere, which really isn’t efficient when we consider interest and investment opportunities. The good news is, it’s fairly simple to consolidate your accounts. Your main fund should be able to help you locate any lost super and ask the companies to transfer your balance to your preferred provider.
Get The Right Advice
Self-managed super funds have seen a dramatic rise in popularity in recent years because of their personalised approach. Unfortunately, this can land you in a bit of hot water if you’re not entirely sure what you’re doing.
It is important that you engage the services of an accredited SMSF Accountant if you’ve chosen to go this route. They’ll be able to help you set your super up so that it works for you and can assist in boosting your returns.
Consider Making Use Of The First Home Super Saver Scheme
This one is obviously only applicable for those who have never owned property before, but if you fall into that category, the First Home Super Saver Scheme (FHSS) could be greatly beneficial to you.
Conceived in the 2017-18 federal budget, the FHSS allows eligible individuals to redraw their voluntary contributions from their superannuation to use as part of their deposit for their first home. If you are considering making use of this scheme, we suggest speaking with a financial advisor and a property investment advisor to ensure everything runs smoothly.
With uncertainty about pensions and the rates those of us who are still of working age will receive come retirement, it’s important that we make the most out of our super. Recent legislation mandating the rise of compulsory employer contributions will be beneficial to all workers, but unfortunately, it probably won’t be enough to set you up for the future of your dreams.
The four tips above will help, but as our advice is general in nature, we strongly suggest speaking with your preferred financial professional before making any major changes. Above all, remember that your super should work for you. If it doesn’t, don’t feel bad about switching providers or changing plans.
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