The Ultimate Guide to Managing Your Superannuation Part 1

This checklist provides the essential guide to protecting one of our biggest assets – super.

We all aspire for a financially secure retirement. Self managed superannuation and other types of funds have given us great control over our retirement package. Unfortunately, many of us, particularly those of us with little experience in investing in super, are prone to making mistakes that diminish the value of our super investments. The checklist below provides an essential guide to protect and enhance our super investments:-

Ensure That Your Super Fund Is Updated With Your TFN

It is mandatory for your super fund to have your TFN (Tax File Number). Your concessional (before tax) super contributions will attract a penalty tax should you not supply your TFN.  Moreover, you will not be allowed to make non-concessional (after tax) super contributions. As if this is not enough, you will also not qualify for co-contributions. You should therefore ensure that your super fund is updated with your TFN.

Clearly Stipulate Your Dependants And Non-Dependants

By clearly stipulating what happens to your super benefits and non-supper assets in the event of your death, you stand to spare you family a lot of heartache and save thousands of dollars in tax. You should clearly identify your dependants and non-dependants by nominating your beneficiaries in good time especially if you want to bequeath your super benefits to a non-dependant such as a financially independent child so as to benefit from several tax savings.

Consolidate All Your Super Accounts

Having multiple super accounts means paying multiple fees and multiple insurance premiums. Combining all super funds makes it easier to track and manage your retirement savings and at the same time allows you to take advantage of the power of compounding returns. However, if you do not combine your accounts in a smart way, the ATO may snuffle your member accounts under new compulsory transfer laws introduced in July 2013. It is therefore important to not only track and combine all your super accounts, but also to consolidate them in a smart way.  Of course you should seek advice from a financial planner before making any decisions to make sure you are financially better off.

Get The Basics Covered

To achieve success in your superannuation fund, you need to get the basics covered. First of all, you need to settle on a fund that meets all your needs. You then need to know and take advantage of all the benefits that your super gives you such as concessional tax rates and estate planning. More importantly, you need to exploit the flexible investment options availed by your super fund.

You also need to settle on the level of your voluntary contributions as well as the extent of additional contributions by taking advantage of strategies such as salary sacrificing. Moreover, you should check that your employer pays for your superannuation guarantee contributions on time each month. You should also decide on the appropriate insurance cover for your situation. If you do not fancy being a trustee of your super fund (self managed super fund or SMSF), you should closely watch over the activities of your fund?s trustees for example by reviewing your fund?s annual report.

Continue to part 2

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