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Bracing yourself for survival in the super wars Posted on April 22, 2021

superannuation

Super: there are more questions than answers.

Will the Government scrap the legislated rise in superannuation from 9.5% to 12%? How much is enough? Are you in the right fund? Can you afford the increasing Life Insurance premiums from within your fund?

It’s enough to want to adopt a mattress-stuffing savings strategy so that you can touch and feel what’s rightfully yours. Thankfully, there are defense and control strategies available.

To the first question, the Federal Government will announce their position on the legislated rise in superannuation contributions from 9.5% to 12% during the May budget. Superannuation Minister, Jane Hume has hinted that the legislation may be scrapped as a wages preservation method for businesses who are in COVID-recovery mode.

The second question – how much is enough? The Association of Superannuation Funds Australia (AFSA) suggest 67% of your pre-retirement income per year from the minute you retire through to your life expectancy – approximately 81 years old for men and 85 years old for women although this is increasing with medical technology and taking better care of ourselves. Affordability takes reverse engineering, and it really does help to have a Financial Advisor to map this out for you. Unfortunately, it’s our last few years of life that are the most expensive, and it pays to be prepared for this vulnerable time.

Are you in the right fund and investment option? This is highly personal as it depends on your age and many other factors. Those looking for greater control over the value and tax implications of superannuation often consider a Self-Managed-Super-Fund (SMSF). This enables the fund holder to run the fund to their benefit and personally select investments such as property and shares in order to build wealth. Diversification is important, as is regular engagement, review and reporting of your fund with a qualified Financial Adviser. We’re holding an information night on Wednesday 28 April to review what’s involved in setting up an SMSF. You can register for free here.

70% of Australians tie up their Life Insurance into their Superannuation. With more than $5 billion in paid claims last year, mainly through income protection, premiums are on the up and up, to the point that the regulator has become involved. Now is a great time to check your Superannuation, ensure that you are structured to afford your fees, generate the highest return possible and ultimately be the one in charge of your money.

Now, take a minute to close your eyes and imagine your future self. What kind of retiree are you? Are you a jet setter? A grey nomad? A grandparent? A golfer? A philanthropist? A cultural aficionado? An enthusiast of some kind? Whatever it is, you deserve it, and with planning, you will afford to be comfortable doing it.

If you have questions about your superannuation, feel free to book a complimentary meeting with a member of our experienced Financial Services team.

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