Superannuation has been designed and endorsed by the Federal Government as the preferred way to save for your retirement, and has added tax benefits that make it particularly attractive.
Although retirement may seem some time away, not considering the means of funding it can be disastrous. Recent changes in legislation, have increased the flexibility of superannaution through Self Managed Superannuation Funds, Transition to Retirement Pensions and new taxation, contribution and cashing rulers.
With the investment of your superannuation having a direct impact on the level of retirement savings you are likely to accumulate on retirement, receiving advice on the most appropriate asset allocation and investment selection is vital.
Superannuation returns example
A 30 year old dentist with a $30,000 superannuation balance, who is contributing $7,000 per annum for thirty years, earning an average 6% compound annually, will achieve a total of $644,046*
If the same 30 year old were able to achieve an average return of 7% compounded annually, his superannuation
balance would grow to a total of $783,633*
* average return and annual contribution is net of any fees and or taxes
Salary sacrifice example
A 50 year old dentist earning $250,000 p/a has a marginal tax rate of 46.5% (including Medicare levy). By implementing a salary sacrifice strategy and contributing some of your pre-tax earnings to superannuation, you could save up to 31.5% tax on these contributions
|Pay tax at marginal tax rate (46.5%)||$4,650|
|Net funds available for investment||$5,350|
|Pay contributions tax within super (15%)||$1,500|
|Net funds invested||$8,500|
|That is an instant tax saving of||$3,150|
Dental WealthCare administers a dental specific super fund, and can provide you with specific advice in relation to the investment of your superannuation.