In the current difficult economic climate, people are turning to the self-managed super funds to ensure they manage and secure their nest egg retirement. Benefits of SMSF wide and varied, but one of the main attractions with certain types of retirement plans are tax benefits that can be obtained.
People often do not realize positive financial opportunities available when it comes to salary expenses. If you arrange with your employer to make additional contributions to the super self-managed fund, you will only be taxed 15% on them. This is because the money is not allocated to a personal name or bank account that attracts much higher tax rates. There are several companies such as Motion Accountancy takes the burden out of your SMSF compliance so that you are able to live without worrying about taxes and money at the time of retirement.
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More often than not, people nearing retirement will increase their salary sacrifice because they know they will have access to it in a matter of years as opposed to a few decades. Although you will not get as much of your salary for several years, the tax rate lowered and when it came time to leave work, the savings can have outstanding.
There is a lot of money to be saved with the use of salary sacrifice as a strategy for your self managed super fund. While it may not be your main focus in the early stages of your career and retirement plans, there is plenty of scopes to make it work hard for your tax benefits in the last 5 to 10 years of your working life.
The key to this exploit is to ensure that you are always aware of how much you contribute, what is the balance of your retirement fund each year and what a difference it would make to add a certain amount over the life of the fund. The results will no doubt surprise and delight you.