THERE is little doubt that superannuation is still the most tax preferred and tax advantaged investment as far as the government is concerned.
THERE is little doubt that superannuation is still the most tax preferred and tax advantaged investment as far as the government is concerned.
The imposition of a 15 per cent tax on the returns earned by a superannuation fund is a concession that few, if any, other investments can offer.
Yet it would also be fair to say that few Australians take sufficient notice or care of their superannuation. The average Australian changes jobs every five or six years and ends up with multiple superannuation funds.
The advantages of consolidating these funds into one are substantial. Reduced fees, greater control and less administration are just some of the gains to be made by consolidation.
In a recent article in Business News I made reference to the ATO’s register of lost superannuation accounts.
At present the register numbers 2.5 million accounts with an average amount in each account of $1700.
That is about $4.25 billion that does not have a home. Surely, if we were serious about our retirement, we would be ringing the ATO to find out if any part of that belonged to us.
Leaving aside the issue of the number of superannuation funds and accounts that we may or not have, the other area that we are entirely deficient in is
monitoring where the underlying funds are invested. Superannuation is a very long-term investment.
The primary feature of a long-term investment is that we can afford to take greater risks.
In the event of a loss of any kind we have ample time to recover the losses.
However, we have this misguided notion that, because superannuation is there for our retirement, we should not invest in any area unless it is either capital guaranteed or capital stable.
In other words, we take far too little risk in our superannuation investment profile.
In dollar terms, the difference between a 6 per cent or 9 per cent return on your investment can, over a lifetime of employment, make a $275,000 difference to the final payout.
Perhaps this might be an opportune time, with our thoughts turning to New Year’s resolutions, to add one that says we will endeavour to study our superannuation and seek advice on trying to improve our arrangments.
Next year could be the dawning of both a new century and a new era in our investment and superannuation lives.
The imposition of a 15 per cent tax on the returns earned by a superannuation fund is a concession that few, if any, other investments can offer.
Yet it would also be fair to say that few Australians take sufficient notice or care of their superannuation. The average Australian changes jobs every five or six years and ends up with multiple superannuation funds.
The advantages of consolidating these funds into one are substantial. Reduced fees, greater control and less administration are just some of the gains to be made by consolidation.
In a recent article in Business News I made reference to the ATO’s register of lost superannuation accounts.
At present the register numbers 2.5 million accounts with an average amount in each account of $1700.
That is about $4.25 billion that does not have a home. Surely, if we were serious about our retirement, we would be ringing the ATO to find out if any part of that belonged to us.
Leaving aside the issue of the number of superannuation funds and accounts that we may or not have, the other area that we are entirely deficient in is
monitoring where the underlying funds are invested. Superannuation is a very long-term investment.
The primary feature of a long-term investment is that we can afford to take greater risks.
In the event of a loss of any kind we have ample time to recover the losses.
However, we have this misguided notion that, because superannuation is there for our retirement, we should not invest in any area unless it is either capital guaranteed or capital stable.
In other words, we take far too little risk in our superannuation investment profile.
In dollar terms, the difference between a 6 per cent or 9 per cent return on your investment can, over a lifetime of employment, make a $275,000 difference to the final payout.
Perhaps this might be an opportune time, with our thoughts turning to New Year’s resolutions, to add one that says we will endeavour to study our superannuation and seek advice on trying to improve our arrangments.
Next year could be the dawning of both a new century and a new era in our investment and superannuation lives.
