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Wealth Creation

“Many know that superannuation, or “super” for short, is often focused on thinking ahead and saving up funds for retirement, but many are uncertain whether their super is really working for them.”

Superannuation

Understanding superannuation

Superannuation is a word that most Australians are familiar with, right from starting out on their first job through to their golden years. They know that superannuation, or “super” for short, is often focused on thinking ahead and saving up funds for retirement, but many are uncertain whether their super is really working for them.

On the other hand, for many immigrants to the land down under, super can be just as daunting as stepping off the plane to make a new home for your family. With a plethora of funds and options available, where should you start? Do you go with the default offered by your employer, or is there something better for you?

Our financial planning specialists can guide you through these decisions with your end goal in mind and help you take the guesswork out of the process.    

How does super work?

Super is a long-term investment that accumulates with time. 

In most cases, your employer pays a percentage of your wages into your chosen super fund and the money is invested into the option/s you have selected according to your risk profile, with the purpose of growing the balance as the years pass and you near retirement. 

For self-employed individuals, you’re not required by law to pay yourself super, but there are many advantages to utilising super as a mechanism for planning for your future.  

There are also various additional contributions you might choose to make with a view to boosting your balance – each with its own tax implications and limitations you’d want to take into account. 

You may also be surprised to know that super is not just about retirement. In addition to using super to pay for insurance, your super can also form an important part of your tax planning strategies to make the most of your financial situation.  

Commonly asked questions about super

  • How much money would I need in super to fund my retirement?
  • Can I claim any tax deductions for my contributions to super?
  • Is my super fund invested in the best way for me and my preferences?
  • What if I have multiple accounts with different super funds?
  • I’ve heard about Self-Managed Super Funds (SMSF). Would this be right for me?
  • What about bringing money from overseas?
  • How does super work for if I am self-employed?
  • When can I access my super?
  • What happens to my super if I pass away?
  • What are the fees and how can I minimise these?
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Fun Fact

Superannuation was first introduced into Australia in 1900.  Nearly 10 years later the Invalid and Old Aged Pensions Act 1908 was passed, which would officially introduce super payments to the whole country.

“Investments play a crucial role in financial advice and can be used to complement your family’s wealth creation plan and your own retirement planning strategies.”

Investments

Investments play a crucial role in financial advice and can be used to complement your family’s wealth creation plan and your own retirement planning strategies. They can be owned personally or through a trust.

While they’re not something to jump into without doing your due diligence, a smart investor also realises that their investment strategy should align with their time horizon and the purpose of their investment. In other words, how long would you expect to hold an investment before needing to access the funds? Another vital question to ask relates to your risk tolerance – your ability and willingness to endure market volatility. These and other factors shape the allocation of your investment portfolio across growth and defensive assets.     

Investments that we provide advice on include but are not limited to:

  • Property
  • The share market
  • Investment bonds
  • Managed funds
  • Separately Managed Accounts (SMAs)
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“Purchasing property is not something to be done without taking into account other crucial elements of a robust financial plan.”

Property

Investing in property is one option you may be considering as part of your tailored wealth creation plan. 

Like other alternatives an investor might be exploring, your decisions will factor in the time horizons relevant to your situation, such as a short or long term goals connected with investment in property. You would also want to take professional advice to ensure your property ownership is correctly and effectively structured, for instance via a Self-Managed Super Fund (SMSF) or potentially personally owned.

Purchasing property is not something to be done without taking into account other crucial elements of a robust financial plan. For most investors, this will include analysis and recommendations surrounding your personal risk mitigation needs, or in simple terms your personal need for insurance to protect the liability you have taken on. 

Sound financial advice in this area may also include debt management strategies to make your investment work for you instead of against you. Similarly, negative gearing is something you may be questioning, and a holistic financial planning specialist can help you assess whether it could be worthwhile or not.

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