What is superannuation planning?
Superannuation is essentially a long-term savings plan, during your working years, a portion of your income as mandated by law, is contributed to a superannuation fund. This fund is then invested in various assets, such as stocks and bonds, with the aim of growing your retirement savings over time. The goal is to accumulate a sufficient nest egg to support you in retirement when you’re no longer earning a regular income.
Why Superannuation Planning Matters
We think your golden years should have some sparkle, or the name doesn’t really fit. And sparkle’s hard to fund on a shoe-string budget.
Preferential tax treatment afforded to superannuation means there’s more to play with, because you didn’t send it off to the tax man. We like to think of super as the cornerstone of a comfortable retirement. Our dedicated team of financial advisors are here to guide you through the intricacies of superannuation, helping you make informed decisions for a prosperous future.
Why do I need a financial advisor for this?
Financial advisors begin by assessing your unique financial situation, including your current superannuation balances, financial goals, risk tolerance, and expected retirement age.
Based on this assessment, they develop a tailored superannuation strategy. This may involve consolidating multiple superannuation accounts, making additional contributions, or adjusting your investment portfolio to align with your goals.
Superannuation funds often offer different investment options, each with varying levels of risk and return. Financial advisors help you select investments that match your risk tolerance while maximising your potential returns.
Superannuation is subject to various tax rules, and financial advisors can help you navigate these complexities to minimise your tax liability, both while you’re contributing and when you start drawing upon your superannuation in retirement.
Advisors can help you determine how much you’ll need in retirement and create a plan to achieve this goal. They’ll consider factors like the age at which you want to retire, your desired lifestyle, and potential government benefits.
Superannuation planning isn’t a set-and-forget endeavor. Advisors continuously monitor your portfolio’s performance and make adjustments as needed to keep you on track to meet your retirement goals
How will Thrive Financial help?
Your retirement deserves the best possible planning. Take the first step towards a worry-free future by scheduling a consultation with our expert financial advisors. Together, we’ll design a superannuation plan that paves the way for a secure and comfortable retirement. Don’t leave your retirement to chance. Secure your future with Thrive Financial today.
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Glossary of common terms
- Bear market – A market in which prices decline sharply in light of widespread pessimism about economic conditions. The opposite of a ‘bull market’.
- Benchmark – Usually represents the minimum performance objective for an investment portfolio.
- Bull market – A market in which prices rise in light of widespread optimism about economic conditions.
- Concessional contributions – Superannuation contributions made from before-tax income for which a tax deduction can be claimed (also referred to as deductible contributions). Concessional contributions include employer Superannuation Guarantee (SG) contributions, additional employer contributions (salary sacrifice) and contributions made by the self-employed for which they claim a tax deduction.
- Conditions of release – These are restrictions placed on superannuation funds for how and when preserved benefits can be paid.
- Contribution cap – This is the limit on the amount of contributions that can be made for an individual. Contributions in excess of the cap will be subject to excess contributions tax. Concessional and non-concessional contributions have different cap amounts.
- Investment fee – how much you must pay your investment manager, or the MER %. This typically depends on the investment option you choose.
- Management fee – how much it costs to pay the fund for managing your super balance, this is usually tiered by balance level.
- Membership fee – how much it costs to join the super fund
- MER % – the management expense ratio, or what proportion of your investments you must pay your investment manager.
- Non-concessional contributions – These are contributions made from a person’s after- tax income. The terms ‘non-concessional contributions’, ‘post-tax contributions’ and ‘after-tax contributions’ are often used interchangeably
- Portfolio – An investor’s range of investment holdings.
- Preservation age – The minimum age at which members can access their superannuation benefits, provided you have permanently retired from the workforce.
- Salary sacrifice – An agreed arrangement between an employer and an employee whereby the employee agrees to sacrifice a part of their gross salary in exchange for a benefit, such as extra employer contributions to superannuation. An annual contribution limit applies.
- Superannuation Guarantee (SG) – Employer contributions are usually called Superannuation Guarantee (SG) contributions.
- Superannuation co-contribution – If you’re a low or middle-income earner and make personal (after-tax) contributions to your super fund, the government may also contributes to your superfund.
- Yield – The return of an investment, expressed as a percentage. Can also refer to the profit that an investment is likely to return.