Whatever your age and no matter how much money you have, now is the time to start building your super. Make a few small changes and watch your super money grow.

It’s easy to think of super as just a percentage of your salary that you can’t access. But it’s important to remember – it’s your money, it’s just being held for you until you retire. The main idea behind superannuation is to help you build a nest egg which you then use to create an income in retirement (or semi retirement). Including it as part of your financial plans can be important for a number of reasons:

• The Age Pension may not be enough for a comfortable retirement

• You may not be eligible for the Age Pension.

• You may spend over twenty years in retirement and your money will need to last.

• Because super enjoys the benefits of compound interest and a long investment timeframe, it could be your largest asset by the time you retire

• The government is offering attractive tax incentives.

How tax-effective is super?

For most people, saving through super can be much more tax effective than saving the same amount outside super. Firstly, any contributions your employer makes (up to a certain limit) and any returns on your super are taxed at a maximum of 15%, rather than your marginal tax rate which could be as high as 45%. To see exactly how this works go to Super is a tax-effective investment strategy.

For most people, saving through super can be much more tax effective than saving the same amount outside super. Firstly, any contributions your employer makes (up to a certain limit) and any returns on your super are taxed at a maximum of 15%, rather than your marginal tax rate which could be as high as 45%.

What (current) tax-effective incentives are on offer?

• Salary sacrifice

• Additional spouse contributions

• Super splitting with your spouse

• Co-Contributions

• Access your super whilst still working

• Small business capital gains tax (CGT) concessions

• Roll your super over into an allocated pension when you retire

• Pension payments and withdrawals over the age of 60

• Combining one or more of the applicable strategies above to fund insurance premiums tax effectively

NB. Beware of the caps! There are caps on the amount of concessional (before tax) and non-concessional (after tax) contributions you can make each year.

What to consider next

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