Most Australia’s dislike superannuation and they don’t trust it. It’s something that has been forced on them, it something they think the Federal Government is always fiddling with and changing the rules on and its something that they have little understanding or knowledge of.
More, most people don’t want to know about superannuation.
Yet the reality is that the Federal Government, regardless of which political party is in power, has made it clear that it wants more and more Australian’s to support themselves through their retirement.
What’s more, they are constantly cutting back on who is eligible for the age pension and when they will start receiving it. Moving the age pension back to 70 is really just the start of the Federal Government winding back age pension entitlements.
So whether you like it or not superannuation is here to stay and you really should make the most of it because it is one of the few remaining ways to reduce the tax you will paying on earning money and creating wealth.
During you working life, the funds within your superannuation fund will be taxed at 15% which is likely to be well below your marginal tax rate. By investing directly in quality companies listed on the Australia Stock Exchange, who are paying high yielding fully franked shares, this tax rate can be further minimised.
Then once you do retire, and we start paying you an allocated pension from your own superannuation fund, the fund effectively becomes tax free, both in terms of income being generated by the assets in your fund and any capital gains it might generate.
So you should be looking on superannuation as your personal tax haven – now do you understand why its important.
In fact most of my working day is trying to work out how we can maximise how much money we can squeeze into superannuation as there are strict laws as to how much you can contribute and when, because it is so beneficial to have any long term assets sitting inside superannuation.