Calculate your needs

Essentially, the amount of super you need depends on how long you live, what type of lifestyle you want and future medical costs. The Association of Superannuation Funds of Australia (ASFA) Retirement Standard offers a rough idea of how much it will cost to live a modest or comfortable retirement lifestyle. 

A  modest retirement lifestyle is considered better than the Age Pension, but still only able to afford fairly basic activities.

A comfortable retirement lifestyle enables an older, healthy retiree to be involved in a broad range of leisure and recreational activities and to have a good standard of loving through the purchase of such things as; household goods, private health insurance, a reasonable car, good clothes, a range of electronic equipment, and domestic and occasionally international holiday travel.

Both assume that the retirees own their home outright and are relatively healthy.

The estimates in the table below applies to people retiring at age 65 who will live to an average life expectancy of about 85.

Source: www.superguide.com.au (accessed 2 December 2015)

Self Managed Super

One of the most tax-effective ways to build wealth for retirement is through a Self Managed Superannuation Fund (SMSF).  Your SMSF can borrow to purchase property, such as your business premises, commercial, industrial or residential property. The property is then protected from creditors as it is part of your SMSF. Superannuation contributions can be used to make principal and interest repayments on the loan and you will receive tax deductions for these contributions.

There is no Capital Gains Tax (CGT) payable on the sale of the property when your SMSF is in pension phase. Even if you sell before pension phase, the CGT is only 10 percent.  Your SMSF can also take advantage of franking credits attached to dividends received from public companies.  

You may like to start accumulating superannuation in a SMSF now by putting automatic transfers into place.

 For more information call one of the SD team on 02 9526 1211.