Still have time on your side until retirement? Here’s how to make sure it’s well utilised so your superannuation balance will enable a comfortable retirement.
Let’s assume you are forty-seven 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, while at the same time overlooking your super. Business owners often think the proceeds from selling their business when retiring will be the boost their super needs in order for them to live comfortably. Whilst this can work, it’s not without risk and there are other options. Accru can advise you on a number of strategies to increase and structure your superannuation balance between now and retirement to ensure you will meet your goals.
There are a number of strategies that are suitable for you in order for you to increase your superannuation balance. These include:
- Personal super contributions
- Carrying forward unused concessional contributions
- Salary sacrificing
- ‘In-specie contributions’ (superannuation contributions made using assets other than cash)
- Spouse contributions
- Downsizer 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. Appropriate investing means that 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 approximately 15 years before needing to access your super, this timeframe 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. This is because earnings or part earnings from these assets will generally be tax free.
Assuming that you and your spouse 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 to superannuation in respect of the member with the lower super balance, or undertaking contributing splitting (that is, rolling over a portion of the contributions you have recently made to your super account). There are estate planning reasons why this could be beneficial in the future to consider, as well as the current $1.7m cap per person on pension account balances.
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. Therefore it is recommended that you check your insurance policies to ensure they are sufficient for your needs.
Finally, no matter how good the strategyyour strategies, they , it must be adhered to followed and regularly reviewed to ensure it they are is still appropriate for your needs. Remember also that yourYour 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 assist you in this regard.
Need an expert adviser to assist you in preparing your business succession plans? Contact the experts at Accru today