| If you are now,
or have been, a member of a superannuation fund then the assets
you hold in funds could generate an important part of your retirement
income.
What is superannuation?
Superannuation is an arrangement where people save and invest during
their working lives for their retirement.
Most employers are required to contribute to their employees' superannuation,
and self-employed people may receive tax deductions for contributions
to superannuation.
There are complex rules on preserving and accessing superannuation
benefits.
Generally, contributions to superannuation can be made up to age
74 providing the individual is still working at least part-time.
Benefits are available to be withdrawn on retirement from the age
of 55, (increasing gradually to age 60 for those born after 30 June
1960).
Taxation on superannuation
Investments within superannuation funds are subject to income tax
of up to 15% on earnings and 10% on most capital gains along with
other tax is payable for this type of investment.
The benefits taken on retirement are taxed at concessional rates
up to a Reasonable Benefit Limit (RBL). If transferred to a retirement
income stream, superannuation may enjoy a more favourable tax treatment.
Social security benefits
If you apply for social security benefits the value of your superannuation
will not be assessed for means testing until you are at least Age
Pension age.
If you could be affected by the assessment of superannuation you
should talk to your Omas Limited financial planner who may be able
to restructure your portfolio to preserve payment of your benefits.
Rollover funds
People who change jobs, or are made redundant, may ‘roll over’ their
superannuation into another fund.
The fund they are leaving will calculate their entitlement and generate
an Eligible Termination Payment (ETP), which can be rolled over
into another superannuation fund (or a rollover fund). In some cases,
the funds may be taken in cash, either totally or in part.
You may, however, have to pay tax on part of the cashed amount.
Rolling over superannuation assets may not always be the best option.
Your Omas Limited financial planner will be able to advise you whether
to take cash or rollover, depending on your own particular circumstances.
Boosting your superannuation savings
There are a range of ways you can boost your superannuation savings.
You may want to make automatic contributions to your superannuation
from your before tax salary or consolidate your super funds into
one fund.
For more information, please contact us. |
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