Superannuation & SMSFs

“The secret of change is to focus all of your energy, not on fighting the old, but on building the new” (Socrates)

In Australia, most people are reliant on their superannuation at retirement. It is therefore critical to ensure you maximise your investment returns and tax benefits from your superannuation to build a comfortable future in retirement. Having an insufficient balance may result in you obtaining the Commonwealth Age Pension and not being able to enjoy a comfortable and rewarding retirement. On the other hand, you may want to obtain the Commonwealth Age Pension. If that is the case, it is essential to consider your personal income and assets before retirement as they will affect your eligibility for it. The Commonwealth government has provided a range of tax benefits and incentives to ensure people are able to build for their retirement. As living standards are increasing, the normal contributions provided by the employer are most likely insufficient to provide a sound balance to support your retirement hence early planning to build your wealth within your superannuation is essential before you retire.

Self-Managed Super Fund (SMSF) have become popular in recent years. Some of the reasons for the popularity is the ability to self-manage your own superannuation portfolio, pooling your partner’s superannuation balance together and being able to borrow to purchase a direct investment property. Although, this may sound like a great idea, as trustee of your own super portfolio, there is a high level of responsibilities and the initial and ongoing costs may be higher compared to having an industry or retail fund. To establish a SMSF, it is recommended to have at least a minimum balance of around $250,000.