DON'T NEGLECT SUPERANNUATION
Without doubt the best vehicle for retirement saving is superannuation. Many people shy away from it because they believe the rules are too complex or keep changing but this could be a costly view.
For 99% of people the rules are simple. Yes, there have been a number of changes but these have mostly involved limiting the amount you can have in this low tax area and encouraging you to take an income, not a lump sum, when you retire.
In essence, superannuation is a vehicle in which you build assets that will provide an income for you in retirement. To make this strategy attractive the earnings of the superannuation fund are taxed at 15% per annum and the capital gains made by the fund are taxed at just 10% per annum. The main disadvantage of having money in superannuation is that you lose access to it until you retire permanently after age 55. No government would be silly enough to offer a low taxed savings vehicle that will allow investors to make withdrawals at will.
A common complaint is that a particular superannuation fund is not producing high enough returns. When this happens it is because the fund is investing in poorly performing assets or because its fees are too high. Both of these problems can usually be rectified, but neither is the fault of superannuation itself.
When you retire you can withdraw your money and pay exit tax of up to 15% or roll it over (without paying exit tax) into an allocated pension fund. This enables you to start drawing a pension from your fund. For most retirees this pension is tax-free.
If you feel your superannuation is not performing as well as it should or you
have yet to embark on a superannuation plan, why not telephone your nearest Whittaker
Macnaught office for a meeting to discuss this with one of our senior financial
advisers?
|
