Welcome to our Four Part Super Series covering starting, building, planning and receiving your superannuation retirement savings.
Part 2 – Building My Super
Are you in your 30’s and 40’s and starting to take an interest in your superannuation? There is no time like the present so make sure you know all the options, tips and tricks that are available to you so you can make smart decisions about your future.
Hot spots for you when it comes to building and protecting your superannuation in this phase of your life include making contributions, reviewing your insurance, SMSF’s and investment decisions. Sounds like a lot so let’s break it down for you:
Making Super contributions
Employer contributions are the key contributions most people make at this stage of their lives. This is currently 9.5% of your salary and are made by your employer on at least a quarterly basis to your nominated superannuation fund. Make sure you check your balance regularly and confirm your employer contributions are being made within the required time frame.
Salary sacrificing: This is where you put a little bit more away into your super before you receive your pay. It means you don’t pay personal income tax on the contribution as you didn’t receive it as part of your normal salary. They can be a great way to build your super a little bit at a time whilst also reducing your tax. Find out more about Salary Sacrificing and your contribution caps here.
Catch up contributions: These are quite new contribution rules so you may not have heard of them yet. But they can really beef things up for you and have a huge impact on your tax refund at the end of the year. It involves using some of your “leftover” concessional contribution cap from the prior year and claiming a personal tax deduction for it. Knowing how these work is imperative so have a quick read of our blog “Catch-up of concessional contributions” to get a better understanding.
Other personal concessional contributions: This is where you make a contribution to your super fund and claim a personal tax deduction in your tax return. Ensure you know how much you will contribute for the year to avoid excess contributions. Learn more here.
Insurance within Super
Making sure you and your family are protected is really important. It is in your 30’s and 40’s where having your insurance reviewed is priceless. You might think it is only for older people but this is very much not the case. In addition to this there have been changes around insurance in your super which you need to be on top of. Read more about the “Changes to your insurance inside super.”
But what are the different types of insurance? Firstly, there is life insurance which is where a benefit is paid out to your beneficiaries in the event of your death. This insurance often comes “stapled” to Total and Permanent disability insurance (TPD). This insurance cover pays out to you in the event you are severely disabled or terminally ill. And then we have income protection insurance which pays you a percentage of your salary in the event injury or illness prevents you from working for an extended period of time. All of these can be held within your super fund. Seek advice from a qualified insurance specialist to have your insurances reviewed sooner rather than later.
It is usually around this phase of your life where you might start hearing about SMSF’s. You may even have a friend or parent who has one. And perhaps you are thinking about whether you should have one. Well, firstly they are not for everyone. But they are a great vehicle for those wanting to have control over their super fund and have access to alternative asset classes that your traditional super fund cannot offer. Find out more below:
Investment Options & Diversification
Knowing about how your superannuation is invested is really necessary to ensure your risk profile is aligned to your investments. It should be considered closely whether you have superannuation in a public fund or an SMSF. For those in a public fund contact them directly to find out more about your risk profile and your portfolio options.
For those that do have an SMSF have a read of these to learn more about this space including what investment choices you have within your fund:
So sit down, grab a cup of coffee and check where you are at with your super.
If you need assistance with your super or would like to learn more about SMSF’s get in touch with us here.
This information has been prepared without taking into account your objectives, financial situation or needs. Because of this, you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation or needs.