Superannuation is one of the most tax effective ways of saving for your retirement.

Contributions are currently taxed at 15% on employer and salary sacrifice contributions and any earnings are also concessionally taxed at a maximum of 15%. This means you can accumulate wealth a lot faster in superannuation than saving outside superannuation at your marginal tax rate.

Our knowledge of tax and business planning is also valuable in determining the most tax effective superannuation strategy for you.

At Elite Financial Solutions we can offer a range of superannuation funds suitable for every investor, from personal superannuation to more complex self managed superannuation structures.

From our independent research available through Count Wealth Accountants we can offer a range of investments, selecting only those Fund Managers with the highest ratings of AA and A. This approach is designed to deliver above average returns and better service, and most importantly reduced risk to our clients.

Superannuation is designed to create long term wealth and at Elite Financial Solutions we regularly review your progress to ensure you are on track to achieve that wealth, whilst advising on the many legislative changes that can affect you along the way.

To find out how we can assist you in creating wealth, please ring Elite Financial Solutions on 02 9868 3900 or email our Financial Planner on invest@elitefinance.com.au

Saving Through Super

The following example shows how investing through superannuation helped one of our clients achieve his retirement goal.

James, a computer technician earning $48,000 per annum, is 41 years old and is starting to get more serious about saving for his retirement years. His employer is contributing the usual 9% of salary to James’ super fund. James thought about starting a savings plan, contributing $1,000 per month to a diversified managed fund.

After taking income tax and Medicare Levy of $315 into account, James will have $685 to invest. Any income this fund generates will be taxed at James’ marginal income tax rate of 30% (+1.5% Medicare Levy).

Instead, James’ financial planner at Elite Financial Solutions has suggested that he salary sacrifice $1,000 per month to his superannuation fund. In this scenario, instead of paying the $1,000 to James, his employer will contribute the money directly to his super fund.

In this case, there will only be a tax liability of $150. Therefore, James will have $850 to invest and any income generated within the fund will be taxed at 15%.

Using this strategy will let James invest an extra $165 per month or $1,980 per year. Combine this with the fact that income from the investment will be taxed at a lower rate and you can start to see how superannuation can be a powerful tool used in your retirement planning.

The following graph represents projections over twenty years of what returns James may expect if he chose to:

a) invest his money with pre-tax dollars in medium-risk diversified managed funds via salary sacrifice

b) invest his money with after-tax dollars in medium-risk diversified managed funds in his own name

c) invest his money with after-tax dollars in term deposits