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Superannuation is one of the most tax-effective ways to invest for your future. It is also one of the most misunderstood. Rather than thinking of Superannuation as an Investment people should view it as a Tax Saving Vehicle.These days virtually whatever you can invest in, in your own name you can also invest in through Superannuation. The difference is that your superannuation pays little or no tax. The benefit of this cannot be over estimated. Take for example investing $10,000 in shares in your own name or in superannuation at age 30. By the time you are retired at say age 60 the amount you have available for your retirement assuming a return of say 12.0% before tax would be approximately as follow: Invested in your name (after tax) - $127,267 Invested in Superannuation (after tax) - $304,318 So even though you are getting exactly the same percentage return in your own name before tax you are far wealthier if you have invested through superannuation. |
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