The Third Pillar
Despite all the changes governments have made, ‘super’ is still the best opportunity in town. Fancy buying investments and making the cost tax deductible!
Superannuation has earned itself a bad name. Since 1983 hundreds of changes have been made to the rules governing super funds. We have an industry in turmoil, and yet, today we can buy a house or BHP Shares and have all bar 15% of the cost price as a tax deduction. And the income is only taxed at 15%. Not bad. If you wanted to buy the building your business currently operates from, could your super fund buy it? Sure.
So is super really worth the hassle? We think it is appropriate in many cases. Imagine for a moment that you have 15 years to build a nest egg for retirement and you are prepared to forego $10,000 pre-tax income per year to build such a nest egg. Investing the money yourself, after paying 48.5% income tax, and earning 10% results in a final sum of $112,400.
On the other hand, investing the money via Salary Sacrifice into a superannuation fund paying only 15% tax, results in a final sum of $240,000. More than twice as much!
Let’s talk about getting your super fund to work for you.
Please feel welcome to contact Byron Factor to discuss how the Four Pillars can help transform your wealth position on 07 3369 8544.