Superannuation and Retirement Planning
In Australia, we have an ageing population and the government cannot afford to provide age pensions to everyone. This means they need to encourage people to save towards their own retirement and this is the reason why superannuation exists.
In order to encourage people to use superannuation and save for their own retirements, the government has provided some very attractive taxation benefits to funds held within the superannuation environment. While people are working and growing their superannuation, the maximum tax rate on money in superannuation is 15%. In retirement after age 60, they can receive all their benefits tax free.
Unfortunately, while superannuation remains a very attractive mechanism for saving for retirement, the constant government tweaking of the rules means that many people don’t fully understand how superannuation works, what they can do with it and the complete range of concessions available.
Among others some available strategies can include:
- Transition to retirement pensions
- Allocated pensions
- Withdrawals & re-contributions
- Child Pensions
- Spouse contributions
- Spouse contribution splitting
- Super co-contributions
- Salary sacrifice
- Anti-detriment benefits
While superannuation can be complicated, it exists for a reason and if used well, can make achieving retirement goals much easier.