Superannuation
With investment markets going up and down, it has been a difficult year for investing. It’s important to remember that regardless of whether you invest in cash, shares, property or fixed interest, super will generally give you a better after tax return than the same investment outside of super.
This is due to the simple fact that, for many of us, investments in super are taxed less than investments outside of super. This means that by investing in super you have more money working for you for when you need it in retirement. So there has never been a better time to review your investments. Talk to your financial adviser about investing in super and the options available to you.
Why is super so good? You Pay Less tax!
Most of us invest our money to increase it through capital growth and income. However, the government imposes taxes on that income and capital growth meaning that:
Net Income and Growth = Income and Growth – Tax
This equation is true for all investments whether inside or outside super. So the key difference is the ‘tax’ part of
the equation. To encourage you to plan for your retirement, super is generally taxed less than investments outside super – this is called concessional taxation.
And with the withdrawal of pension benefits tax-free from age 60 there is now even more benefit from investing in super.
Access to your money and superannuation top up limits
If super is so good, then what is the catch? There are some rules we need to work within:
