There is so much uncertainty around super and the belief of many is “what’s the point of putting it in if I can’t get it until I turn 70?”

A few years ago the Government was seen to be changing the rules all the time and talking about extending the retirement age.

It is true that there were a lot of changes in super and what the government was doing was trying to ensure that we don’t put too much into super as we would save too much tax (and they wouldn’t get their tax $$). So they:

- Reduced the amount we could contribute to super as a tax deduction, limiting it to$25000;

- Reduced the amount we could put in from our savings, limiting it to $100,000; and

 - Put in measures that ensured that high wealth individuals were not only restricted from contributing more to super, but they paid tax on their earnings when their balance exceeded $1.6M.

What do we read from this?

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Investing in super is extremely tax effective and is a great entity to hold investments in. Investments in super are taxed at 15% while you are growing your super. Once you retire, these earnings are then tax free.

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With the amount you can contribute to super each year reducing, it is important to talk to you financial advisor about whether you should be contributing more while you are younger rather than waiting until the years leading up to your retirement and being restricted by the contribution limits.

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Although the government is extending the age required to access the Centrelink pension, there has been no commentary about extending the age to access your super. 60 is still the magic number for accessing your super and if you have enough to retire at age 60, they are more than willing to let you access it once you have retired.

Super can be not only tax effective but also a terrific way of accumulating wealth.

If you have any questions, give our super expert, Melinda Kidd, a call on 07 4914 2400! 

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