Superannuation fund is a popular concept in Australia whereby people accrue funds to ensure their income after retirement. It is always supported and encouraged by the Australian Government and requires compulsory minimum amount of contribution from the employees. The employers pay an amount over the fixed salary of the employee; the standards are set at 9.5% as on 01.07.2014.
Setting up of a self managed superannuation fund has become easier with professional assistance available all over Australia. There are several reputed financial advisory services that have made the investment process easier. You can have guidance for any type of superannuation fund you want to set up. The commonly invested superannuation funds can be Industry Superannuation fund, Corporate Superannuation fund, Employer Superannuation fund or personal superannuation fund.
Employees can make an extra amount of voluntary contribution towards a self managed superannuation fund, however if it is more than concession cap for annual superannuation then there will be the contribution tax for making excess payment towards the fund. This is set at 31.5%. Superannuation funds provide security for future, to protect the actual motive of the fund the Government has set up some strict legal guidelines before these funds could be withdrawn. Click this https://www.arrowfa.com.au/office-locations/penrith/ for further information regarding tax returns.
The funds can be withdrawn after attaining the preservation age, that is minimum 55 years of age and all contributions made towards superannuation fund after 01.07.1999, is considered under this category. If the employee terminates the service or meet the condition for release then the fund can be accessed before the preservation age.
There are several benefits of such a fund. These funds provide more control over the direct shares and one can easily have more options to invest money. The best part is the concession on taxes. It will help to grow the savings as there is no tax during the pension phase, investor will not be taxed on the capital that will be received after retirement. As the investors are the trustees, there is huge flexibility in controlling and managing the investment. The investments can be easily planned according to the affordability of the members. There are transparency and proper annual tax returns that can be easily filed. The trustee can combine the assets for up to 3 members; who can be the business partners or even the family members. Combining the assets will ensure larger balance of the funds and thereby increasing the value of the assets and opportunities during the return.
However, before setting up of the fund, the investor should be careful and should acquaint oneself of the legal mandates and formalities. If any part of the money is lost due to fraud or theft then, it cannot be recovered through any compensation scheme. However, with proper knowledge and experience superannuation fund is the best option for the future.