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Investing in your super

People often overlook the advantages of making significant concessional contributions to their superannuation. By investing large sums of money inside your super, as opposed to assets outside of your super, you may end up saving a significant amount on your tax bill.

Concessional superannuation contributions are voluntary amounts that you contribute from your after-tax income. These are different from non-concessional contributions or before tax contributions. If you are under the age of 50, you may contribute up to $30 000 before tax to your superannuation, and if you are over 50, the limit is $35 000.

When you make concessional contributions to your super you do not have to pay any additional tax, as you will have already paid tax at your marginal rate. You may contribute up to $180 000 of your after-tax income each year to your super.

The advantage to investing within your superannuation fund is that all investment returns will be taxed at the flat rate of 15%. If you are thinking about making investments that will serve you in retirement you may care to investigate making larger concessional contributions to your superannuation.

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News

Protect yourself from early super release scams

August 7, 2018

When it comes to protecting your nest egg, avoid getting caught out by a promoter of an illegal early release super scheme.

Early release super scheme scams will involve a promoter contacting you and offering to help you access your super early. They usually target individuals under significant financial pressure or those who are not knowledgeable about super laws and the repercussions and penalties involved in illegally accessing your super.

You can only access your super when you meet a condition of release.

Generally, when you:
– Are 65 years old (even if you have not yet retired).
– Reach your preservation age and retire.
– Reach your preservation age and begin a transition to retirement income stream while still working.

There are special circumstances where you may be able to access your super early.

These special circumstances include:
– Severe financial hardship
– Temporary or permanent incapacity
– Compassionate grounds
– Temporary residents leaving Australia
– Super death benefits (inheriting super)
– Super less than $200
– Terminal medical condition

To avoid falling for an illegal early super release scam, be wary if the promoter:
– charges high fees and commissions;
– requests identity documents;
– claims you can access your super and put the funds towards whatever you wish;
– and tries to persuade you to transfer or rollover your super from your existing fund to a self-managed super fund (SMSF) in order to access your super before you are legally entitled.