In August last year, the Australian Taxation Office (ATO) found that Australians lost $14 billion of their super annuation.
Your super is your investment in your future, so how can you make sure you are not losing your investment? Read on for some important information from financial specialists, Crowe Horwath:
First, you need to find the right super fund for you. But how can you figure that out? There are six criteria for comparing super funds:
- Fees – high fees leech your fund, look for the lowest fees possible.
- Investment Options – make sure your fund suits your needs, and risk profile.
- Extra Benefits – find out if a fund accepts higher employer contributions, and if you can make extra contributions.
- Performance – check how a fund has been doing over at least the last five years.
- Insurance – see if a fund can insure you, and what it will cost.
- Service – make sure to look through their website or call them to find out what other services they offer!
Now that you have a fund, here are five ways to grow it:
1. Salary sacrifice
If you were aged 48 years or younger on 30 June 2015, you can attribute part of your pre-tax income to super via a salary sacrifice arrangement with your employer up to a maximum of $30,000 for the 2015/2016 year. Taxed at only 15%, it may be less tax than you would be paying if you had taken the money as income. Remember though, any super contributions from your employer (9.5% of your wage) is included in the $30,000 concessional contribution limit.You can also add your own after-tax contributions; however, if you’re an employee you generally can’t claim a tax deduction for personal super contributions.
2. Spouse contribution
The government offers a maximum tax offset of $540 each financial year for super contributions of up to $3,000 a spouse makes to the lower income earning spouse’s super (less than $13,800pa).
3. Super co-contribution
If you earn $37,000 or less a year, you may be entitled to a super co-contribution from the government of up to $500 by making personal contributions to your super fund.
4. Combining your super
As discussed, by combining your super funds into one fund, you can avoid paying multiple sets of fees.
5. Review your investment options
When testing your super fund for endurance and planning how to strengthen the core of your financial future, make sure your current investment options in your super fund are in line with your estimated retirement age and your attitude to investment risk. It’s also important to consider your insurance needs. Is it adequate for any changed circumstances? What if you are out of the workforce for a time?
It’s more important than ever to take an interest in your super fund from an early age. After all, your retirement depends on it!
If you’re looking for more #FinanciallyFit exercises, sign up for Crowe Horwath’s financial boot camp enewsletter series at www.crowehorwath.com.au/financiallyfit.
Words by Izrin Ariff
All financial advice by Crowe Horwath
Images from Crowe Horwath
This information is for general information only. Any advice in it has been prepared without taking into account your objectives, financial situation or needs. You should therefore not act on it without first taking those things into account and seeking professional advice.
While all reasonable care is taken in the preparation of this information, to the extent allowed by legislation, Findex Advice Services Pty Ltd ABN 88 090 684 521 AFSL No. 243253 t/as Crowe Horwath Financial Advice, accepts no liability whatsoever for reliance on it. All opinions, conclusions, forecasts or recommendations are reasonably held at the time of compilation but are subject to change without notice.