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What is Superannuation?An explanation of Australia’s retirement savings system

By Chris Strano

http://www.superguy.com.au/what-is-superannuation-superguy/

2http://www.superguy.com.au/what-is-superannuation-superguy/

• A vehicle used to save for retirement in a tax effective manner

• All income and capital gains taxed at a maximum of 15%

3What is Superannuation?

• Superannuation is a Trust structure• A trustee is responsible for the management of benefits

on behalf of its members• Each member has a member balance:- either

‘Accumulation Phase’ or ‘Pension Phase’.

4What is Superannuation?

• Super – What’s the Catch?• Can’t access until meet Condition of Release

• Age 65• Permanent Retirement after Preservation Age 55-60• Ceasing an employment arrangement after age 60• TPD• Death

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What is Superannuation?

• Super Investments?.• Cash, Term Deposits, Shares, Property….

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What is Superannuation?

WHY SHOULD I INVEST IN SUPER?

• Savings that you don’t need until retirement• Receive the Govt Co-Contribution• Forced retirement savings• Reduce tax on investment earnings• Reduce personal income tax

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What is Superannuation?

SUPERANNUATION TAX

• Accumulation Phase - 15% on income/interest• Accumulation Phase – 15% on realised capital gains

where asset owned <12 months• Accumulation Phase – 10% on realised capital gains

where assets owned for >12 months• Pension Phase – 0% on all income and capital gains

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What is Superannaution?

INDUSTRY FUNDS

• Low cost superannuation account linked to a particular industry

• Limited investment choice• % based fees• Professional Trustee

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What is Superannuation?

RETAIL FUNDS

• Little more expensive than Industry Funds, but getting cheaper

• Wider range of investment options• Fees charged as %• Professional Trustee

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What is Superannuation?

CORPORATE FUNDS

• Employer Linked• Similar to retail funds• Fees charged as a %• Professional Trustee

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What is Superannuation?

SMSF

• Less than 5 members• Each member a trustee/director of corporate trustee• Generally flat fees• Investment choice only limited by legislation, trust

deed/SMSF investment strategy

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What is Superannuation?

SUPER IN A NUTSHELL

• Save money for retirement in a tax effective manner.• Tax concessions are an incentive for people to save for

their own retirement• Reduces stress on Government funded retirement• It’s your money! So manage it like you would any other

money.

13Chris Strano

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http://www.superguy.com.au/what-is-superannuation-superguy/

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