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Superannuation FAQsSuperannuation is a crucial element of retirement planning in Australia, offering tax advantages and a way to save for retirement. At Right and Keystone Taxation Experts, we specialize in providing comprehensive superannuation advice, including the management of Self-Managed Superannuation Funds (SMSFs). Here are some frequently asked questions about superannuation to help guide your planning. |
| What is superannuation? | Superannuation, or 'super', is a compulsory system where money is placed in a fund to provide for your retirement. Contributions are made by your employer and, optionally, by you. It is designed to be a long-term savings arrangement to ensure Australians have income in retirement. |
| How much is my employer required to contribute to my superannuation? | Your employer must contribute a minimum of 10.5% of your ordinary time earnings to your superannuation account. This is known as the Superannuation Guarantee (SG) and the rate is scheduled to gradually increase to 12% by July 2025. |
| Can I make extra contributions to my super? | Yes, you can make additional contributions to your super either before tax (concessional contributions) or after tax (non-concessional contributions). There are caps on the amount you can contribute each year without paying extra tax. |
| What are the benefits of contributing to superannuation? | Contributing to superannuation is tax-effective as concessional contributions and investment earnings in super are taxed at a maximum rate of 15%, which is lower than most personal income tax rates. Additionally, contributing extra to your super can significantly increase your savings by retirement. |
| What is an SMSF, and how is it different from other super funds? | A Self-Managed Superannuation Fund (SMSF) is a private super fund that you manage yourself, giving you control over your investment decisions. SMSFs are a good option for those who want more control over their super investments and are willing to take on the responsibilities of managing the fund. |
| Who can be a member of an SMSF? | Generally, up to four people can be members of an SMSF. Each member must be a trustee (or director if there is a corporate trustee), taking an active role in managing the fund. It’s important that all members are committed to the ongoing obligations of running the fund. |
| How do I withdraw my superannuation? | You can start withdrawing from your super once you reach your preservation age and meet a condition of release, such as retiring. The preservation age depends on your date of birth and ranges from 55 to 60 years. |
| What are the risks of an SMSF? | While SMSFs offer greater control over retirement savings, they also require significant time investment, financial knowledge, and strict compliance with super and tax laws. Inappropriate investments or non-compliance can result in substantial penalties. |
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For more information or personalized advice about superannuation and whether an SMSF is right for you, contact Right and Keystone Taxation Experts. We are here to help you maximize your retirement outcomes through expert guidance and strategic planning.