The superannuation system is still the best medium to tax effectively save for retirement provided your choose the assets that are right for you. It’s about getting active with your superannuation choices and taking an active interest in your super.
In my experience, Australians take an interest in superannuation when their valuation reaches around $80,000. I’m not sure what the thinking is here and whether there is any statistics to back this up. However from my 17 years of experience as a financial advisor I have noticed this figure create interest.
To show you how little it takes to boost your superannuation for retirement lets create an example scenario.
- Let’s say you have 35 years to run to retirement with a starting super balance of $1,000
- We will assume you are earning $50,000 a year with your employer making 9.5% SG contributions
- We will even deduct the 15% tax (lets make this accurate!)
By now you should know a thing or two about risk profiles, and what yours is (no? find out here). Having 35 years left before retirement you may have an aggressive or growth risk profile. With a 9% annual return you are looking at $970,000 in your superannuation upon retirement. So how easy is it to boost this? Add $100 a month of your own money, claiming a tax deduction, and we go to $1,200,000. Add $200 a month and we are at $1,450,000.
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