Still have time on your side until retirement? Here’s how to make sure that time is well utilised so your superannuation balance provides a comfortable retirement.
Let’s assume you are 47 and own your own successful business. Perhaps you have invested surplus funds over time into your business to grow it to where it is today, whilst overlooking your super. Business owners often think the proceeds from selling their business when retiring will be the boost their super needs to live comfortably. Whilst this can work, it’s not without risk. There are a number of other options available. Accru can advise you on strategies to increase and structure your super balance between now and retirement to meet your goals.
Our specialists can assist in employing any of the following strategies that are suitable for you to increase your super balance:
- Personal super contributions
- Carry-forward unused concessional contributions (effective from 1 July 2018)
- Salary sacrifice
- In-specie contributions
- Spouse contributions
- Specific self-managed superannuation strategies
To ensure your super balance is on track and continues to grow, it is essential that it is invested appropriately. Regardless of the setup of your super or self-managed super fund, you will have some (or full) control over where or what you are invested in. As you could still have 15 years or more before needing to access your super, this is a great opportunity to accumulate the most appropriate assets for you. For example, if you have a self-managed super fund, this may be a commercial property that is leased to your business. The asset composition of your super is particularly important when you retire because generally, earnings (or part thereof) from these assets will be tax free.
Turning our attention to your spouse and assuming they are of a similar age, there is a planning opportunity over the remaining years to retirement to equalise your super balances, if they are currently significantly different. This can be achieved by making personal contributions in respect of the member with the lower super balance or undertaking contributing splitting. There are estate planning reasons why this could be beneficial in the future as well as the $1.6m cap per person on pension account balances to consider.
Another significant consideration is appropriate insurance. This will provide an opportunity for you to continue to make super contributions in the event you are unable to work due to illness or injury. It is recommended you check your insurances to ensure they are sufficient for your needs.
Finally, no matter how good the strategy, it must be followed and regularly reviewed to ensure it is still appropriate for your needs. Your circumstances and superannuation legislation can change significantly between now and retirement. Being ‘engaged’ with your super gives you the best opportunity to build a nest egg you can comfortably retire on. Accru is well placed to help you structure your super to ensure you meet your retirement goals.
Are you in the best position with your super? Not sure? Want to make sure you’re doing everything you can, contact an Accru specialist today.