According to the Financial Services Council, most Australians will need around 60 per cent of their pre-retirement income to maintain their current lifestyle in retirement and many people will face a shortfall in their super.
A new way of thinking is needed to ensure your retirement is provided for, no matter how near or far away it is. Developing a super strategy isn’t difficult or daunting, especially with new reforms making it easier for you to take control of your money – and your future.
Consolidate your super
In Australia, there are about 28 million superannuation accounts. This equates to nearly three accounts for every working Australian.
The reasons for consolidating your accounts are simple:
Save costs by only paying one set of fees.
Reduce the amount of paperwork you
receive by dealing with only one provider.
Make it easier to keep track of your super.
The first step is to see whether you have any lost or unclaimed super. It’s quite easy to lose track of your super if you have changed jobs or have moved without notifying your super fund. Visit the Australian Tax Office website www.ato.gov.au/superseeker to find your lost super.
We can help you make informed decisions about your accounts to ensure you have
a sound strategy in place to save for your retirement. So speak to us if you would like some assistance.
Make your own contributions
The Government has passed a law that raises compulsory superannuation guarantee (SG) contributions from nine to 12 per cent by the 2019/20 financial year. Although this will boost your super savings, it is widely accepted that SG contributions may not be enough to fund the lifestyle you want in retirement, so it is wise to consider adding extra to your super. This is especially prudent if you have had a break from the workforce, such as having a baby or losing your job.
A salary sacrifice strategy involves contributing some of your pre-tax salary to super. This could reduce the amount of tax you pay, as super contributions are taxed at 15 per cent rather than your marginal tax rate. This strategy may allow you to maximise your concessional contribution limit, which has recently changed. For people aged 59 and over at 1 July 2013, a $35,000 cap limit applies. For everyone else the standard $25,000 cap limit will be in force. You should be aware that SG contributions are also included in this cap.
You can boost your super by adding your own personal contributions. Personal contributions are non-concessional or 'after-tax' contributions. You may also be eligible for the Government’s superannuation co-contribution scheme, depending on your income and other circumstances.
Depending on how you and your spouse or partner’s salary compares, either of you could consider making spousal contributions, which may provide you with a tax offset, depending on your circumstances.
Discuss your super with us
We can assist you in putting a plan in place to help pave the way to the retirement you deserve. Whether your retirement is on the horizon, or in the distant future, it’s never too late to take control.
- Research Paper ‘Retirement Savings Gap at June 2011’ by Rice Warner Actuaries for the Financial Services Council, March 2012.
- Research paper ‘Superannuation account consolidation’ by the Financial Services Council and DST Global Solutions, February 2012.