Employee superannuation

For most salaried people, employee superannuation is the major chance you get to save in a tax-effective manner.

If your employer allows you to do a tax-effective salary sacrifice of up to the maximum $25,000, and you can afford it, you should look at taking advantage of the offer.

You should also realize that if you are young and starting out, employer superfunds often offer low-cost life insurance which can be a useful protection for you and your spouse if you are disabled or die (and vice versa).  You should always ask if you can elect to take out a private disability or life policy on a continuation basis if you leave that particular fund.  You should also make sure that you fill in a formally witnessed binding death benefit nomination to make sure your super is not taxed unnecessarily.

There can sometimes be better investment opportunities, and there are “negatively geared” invesmtments which can sometimes be competitive but you would usually be wise to seek advice on salary-sacrificing into super to get the benefit of a 15% tax rate environment for your savings.

Once you have got your super savings up to a reasonable level, you may be able to look at setting up your own self-managed superfund (SMSF) and taking even more control over your financial future and better providing for your family.