Sim­ple but fan­tas­tic strat­egy

Money Magazine Australia - - Q&A | ASK PAUL -

QI am 53 years old, own my own house and con­trib­ute the max­i­mum I can to salary sac­ri­fic­ing my su­per­an­nu­a­tion. Due to age re­stric­tions I have to re­tire from my job at 60. My wife started work­ing part time six years ago and is self-em­ployed. Also our chil­dren have left home.

What do you think is the best in­vest­ment strat­egy for us now? I was think­ing of af­ter-tax con­tri­bu­tions to my su­per­an­nu­a­tion or in­vest­ing in a man­aged share fund. Any ad­vice would be ap­pre­ci­ated.

Thanks for drop­ping me a note, Tony. I’ll keep it sweet and short. Money you put into su­per via salary sac­ri­fice will be taxed at 15%. If you are on an av­er­age sort of wage, this could save you some 20% in tax alone. If you are a higher in­come earner, the tax sav­ings are huge.

Top up your su­per into a good, low-cost fund. Don’t for­get su­per is only a tax struc­ture. In a good fund you can choose the in­vest­ment op­tion you want, so in ef­fect it be­comes a man­aged share fund, only you get a big tax break on money go­ing in and you pay only 15% tax on earn­ings in­side su­per. Fan­tas­tic!

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