The Courier-Mail

BOOMERS MARK BOURIS

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THE first thing you have to know about your su­per­an­nu­a­tion is that it’s your money. In fact, it’s in­come for­gone in your earn­ing years, that you can draw on for in­come when you re­tire.

Se­condly, the su­per that ev­ery­one has heard of is the su­per­an­nu­a­tion guar­an­tee (SG), which re­quires an em­ployer to put a per­cent­age of your in­come into your su­per ac­count. This is cur­rently 9.5 per cent, but you are al­lowed to put more in as a con­tri­bu­tion.

Con­tri­bu­tions are well worth look­ing at: if you salary sac­ri­fice the ex­tra con­tri­bu­tions over and above the SG, you are only taxed at 15 per cent. It’s a great in­cen­tive to save.

So is the tax rate you pay on the earn­ings in your su­per fund. It’s 15 per cent rather than the in­come tax you pay on in­vest­ment earn­ings.

Another thing to fo­cus on with su­per is re­turns and costs. The man­age­ment costs of us­ing a su­per fund man­ager can be any­where from around 0.6 per cent of funds un­der man­age­ment, to 2 per cent. A dif­fer­ence of 1 per cent in man­age­ment fees can add up.

As for the re­turns, you want the money go­ing into your su­per to com­pound and that means you want it earn­ing good in­ter­est but with not too high a risk of go­ing back­wards. For most su­per mem­bers this means find­ing a bal­ance be­tween your risk pro­file, your age and stage, and your goals.

If in doubt about your su­per, and the op­tions, you should see an ad­viser. It could make all the dif­fer­ence when you re­ally need it. Mark Bouris is ex­ec­u­tive chair­man of wealth man­age­ment and ad­vice firm Yel­low Brick Road

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