Superannuation

Superannuation contributions form the basis of a great financial plan from the day you start work to the day you retire. The favourable tax concessions on contributions and investment earnings make it an attractive structure for growing your wealth.  When you are starting out, building your Super contributions is a powerful way to take advantage of the miracle of compounding returns.

As you move through your working life, you can look at more sophisticated strategies for accelerating the growth of your Super form salary sacrificing or other contributions strategies to opening a Self-Managed Superannuation Fund (SMSF) to gain more control of flexibility.

In the approach to retirement, you can implement strategies that provide more tax benefits in the transition to retirement.  We can help you identify opportunities and position your investment strategy to build your superannuation portfolio securely.  Let’s look at some of the key concepts regarding Superannuation.

Superannuation Guarantee Contributions (SGC)

In Australia, most employers are required under federal law to pay superannuation contributions to approved super funds on your behalf.  These contributions are paid at least quarterly, and the minimum contribution rate is known as the superannuation guarantee rate.

What is the Superannuation Guarantee rate?

The superannuation guarantee (SG) is the percentage of your ordinary time earnings (in addition to your wages) paid into your super fund by your employer. The SG rate in Australia is 11.5% P/a and is set to rise by 0.5% per year till it reaches 12% in July 2025.

What are Ordinary Time Earnings?

Your ordinary time earnings (OTE) is the amount you earn for your ordinary work hours. It generally includes leave (annual, sick, long service), some shift loadings, certain allowances (such as danger or on-call allowance), back pay, commissions and bonuses.

For more details on what makes up OTE, see the ATO’s List of Ordinary Time Earnings page payments.

We can help you determine if your superannuation entitlements and investment options are appropriate for your goals.

How can employees boost their Superannuation?

You have the freedom to make voluntary contributions to your super to accumulate savings for the retirement you really want. Earnings within super are taxed at concessional rates, giving it a natural advantage over other forms of long-term investment.

We can discuss options for making personal contributions, spousal contributions, and salary sacrifices so that you feel confident you are making the most of every opportunity to save for your retirement.

It is never too late to boost your super, but the sooner you do it, the longer you have to accumulate retirement funds, often without making much of an impact on your salary.

Self-employed enjoy Tax Deductibility

If you are self-employed, you can enjoy significant tax incentives through the deductibility of super contributions. We can show you how to structure this to make the most of the benefits available and remain within the government's limits.

Self-Managed Superannuation Funds (SMSF) 

Some of our clients want extra control of their super fund, which can be achieved through having a Self-Managed Super Fund (SMSF). This means you are the trustee of your own superannuation fund and can benefit from direct control over the way funds are invested, but you are subject to careful oversight, control and reporting for your fund. An SMSF can help you achieve cost savings and greater flexibility, but it is generally advisable to have a minimum of $200,000 in assets before you consider this option.

Consolidating your Superannuation

As time goes by and you pass from job to job, it is not unusual to end up with several super accounts. This can result in poorly managed or inappropriate investment choices. Even if you have just changed your address and have not told your superannuation fund, you may lose access to your super simply because your fund cannot track you down.

We can help you to get your super working harder by consolidating funds and locating lost accounts.

Taking advantage of Government Incentives

To further encourage retirement savings through super, the Government offers targeted incentives for those who may need more support. Our advice can help you identify what incentives you might be eligible for, including:

  • The spouse contribution scheme allows you to make a contribution to your spouse’s superannuation fund.
  • If you make a personal contribution to superannuation from your after-tax income, you may be eligible to receive a co-contribution from the Government.

We can advise if you qualify for entitlements as part of your overall super strategy.

To speak to our team about your building and maximising your Superannuation, click here