Maximising your Super

Transcription

1 Maximising your Super Pres ented by Darren Royals, Executive Officer, Lutheran Church of Australia Staff Superannuation Fund, Trustee LCA Nominees Pty Ltd AFSL # The information that is provided in the following presentation about Maximising your Super is of a general nature only and does not take into account any person's financial objectives, financial situation or needs. Neither mys elf or the Lutheran Church of Aus tralia Staff Superannuation Fund s Trustee is licensed to provide pers onal financial advice and we recommend that you s eek the assistance of a qualified financial advis or when making decisions in relation to Superannuation. What does Superannuation mean to YOU? Different Ideas / Attitudes Primary Retirement Savings Vehicle for many people Many Legislative Changes All too difficult or complex 1

2 Why should you have Superannuation? Tax Advantages Longer Life expectancies and early retirement Compulsory superannuation guarantee charge How can you maximise your Superannuation savings? Superannuation is YOUR money Consolidate your super Contribute your own money to super Consider your investment options Minimise your costs 2

3 Benefits Consolidate your Super You only pay one set of fees Less paperwork You can have control over your investment strategy Your super is easy to locate Consolidate your Super How to consolidate your Super Gather together all your most recent Superannuation statements If you cannot locate all your statements, contact your previous employer(s) Decide which Super fund to invest in Consolidate your super 3

4 Contribute your own money to Super Salary Sacrifice contributions (pretax) Undeducted contributions (aftertax) Spouse Contributions Salary Sacrifice Contributions (pre-tax) Pre-tax contributions in lieu of gross salary Can result in reduction in tax paid More money invested in retirement 4

5 Undeducted Contributions (after tax) Contributions made from after-tax salary No contribution tax deducted when invested in the Super fund No tax payable when receiving benefit May be eligible for the Government Super Co-contribution Government Super Co-Contribution Co-contribution of $1.5 for each $1 you contribute, max $1,5. Contributions must be from after-tax income. Full co-contribution if adjusted taxable income less than $28,. Reduction in co-contribution between $28, and $58,. Automatically allocated to your super. 5

6 Super Co-Contributions Table If your personal super contribution is: And your income is: $1, $8 $5 Your Super Co-contribution will be: $2 $28, or less $3, $1,5 $1,4 $1,2 $1,2 $75 $75 $3 $3 $34, $36, $1,2 $1,1 $1,2 $1,1 $75 $75 $3 $3 $42, $44, $52, $8 $7 $3 $8 $7 $3 $75 $7 $3 $3 $3 $3 $54, $58, $2 $ $2 $ $2 $ $2 $ After Tax vs. Salary Sacrifice, Gross Income $28,, Super Contributions $3, Gross Income Salary Sacrifice Amount Adjusted Gross Income Less Tax and Medicare Net Income After-tax super contribution Gross Amount into super Government cocontribution Less contribution tax Contribute to Super (aftertax) 28, 28, -4,992 23,8 3, 2,8 3, 1,5 4,5 Contribute to Super (Salary Sacrifice) 28, -3, 25, -4,47 2,953 2,953 3, -45 2,55 Value achieved Total Net Income 2,8 4,5 24,58 2,953 2,55 23,53 6

7 After Tax vs. Salary Sacrifice, Gross Income $58,, Super Contributions $3, Gross Income Salary Sacrifice Amount Adjusted Gross Income Less Tax and Medicare Net Income After-tax super contribution Gross Amount into super Government cocontribution Less contribution tax Contribute to Super (aftertax) 58, 58, -14,442 43,558 3, 4,558 3, 3, Contribute to Super (Salary Sacrifice) 58, -3, 55, -13,497 41,53 41,53 3, -45 2,55 Value achieved Total Net Income 4,558 3, 43,558 41,53 2,55 44,53 After Tax vs. Salary Sacrifice, Gross Income $9,, Super Contributions $3, Gross Income Salary Sacrifice Amount Adjusted Gross Income Less Tax and Medicare Net Income After-tax super contribution Gross Amount into super Government cocontribution Less contribution tax Contribute to Super (aftertax) 9, 9, -29,362 6,638 3, 57,638 3, 3, Contribute to Super (Salary Sacrifice) 9, -3, 87, -27,97 59,93 59,93 3, -45 2,55 Value achieved Total Net Income 57,638 3, 6,638 59,93 2,55 61,643 7

8 Consider your investment options Generally two categories of Investment Options Asset Sector Investment Options Diversified Investment Options Asset Sectors Investment Options Growth Assets Australian Shares International Shares Property Securities Income Assets Australian Fixed Interest International Fixed Interest Cash 8

9 Diversified Investment Options Allo ws you to invest in a pre-mixed selection of Asset Se ctors Options include: Capital Secure (all income assets and no negative returns ) Capital Stable (mostly income assets and some growth assets) Balanced (mostly growth assets and some income assets) Growth (a large majority of growth assets and a small percentage of income assets) Diversified Investment Options The more aggressive the asset allocation the greater the risk! 9

10 Minimise your Costs Compare fees like for like between Superannuation Funds Summary 1. Consolidate your super 2. Contribute your own money to super 3. Consider your investment options 4. Minimise your costs 1

11 Questions? 11