When you’re employed, your employer makes compulsory contributions to your superannuation. When you work for yourself as a sole trader, or you’re in a partnership, making super payments isn’t mandatory. But, it’s still an important thing to consider.
Retirement savings contributions are there to set you up in retirement. Generally, investing money into super will give you better investment returns than just putting it into a bank account. Plus, because the money is effectively locked away until retirement, there’s no temptation to dig into it in the meantime.
Chances are you’ve worked for an employer at some point, and have an existing super fund to add to. If you’ve never worked for anyone, it’s probably time to set up a fund. You can make regular contributions or make lump sums less frequently, to suit your cash flow. Contributions that you make will still benefit from tax savings, and these can mount up.
Another thing that’s very handy for the self-employed and generally offered through your retirement fund is insurance. Your fund may offer you life insurance and income protection insurance. Make sure that you take the time to really understand these policies, as the payout amounts may not offer enough money to replace the income you earn through your business. You may want to source an additional policy as a top up.
If your business is a company and you employ staff, you are responsible for making super payments for eligible employees. There can be serious penalties for failing to do this, so take the time to fully understand your responsibilities.
The DLA Partners and DLA Private Wealth combined approach was established to make it easier for you to receive and implement advice including contributing to your super, starting a pension or creating a SMSF. Our collaboration also provides integrated and holistic advice, conveniently under one roof, on financial planning matters in addition to taxation and accounting.
If you have any questions about DLA Private Wealth or any about any superannuation topic, please contact DLA Partners on (07) 3863 9444 or by emailing clientservices@dlapartners.com.au
General Advice Warning
The information provided is general advice only. We have not considered your financial circumstances, needs or objectives and you should seek the assistance of your GPS Wealth Ltd adviser before you make any decision regarding any products mentioned in this communication. Whilst all care has been taken in the preparation of this material, no warranty is given in respect of the information provided and accordingly neither GPS, nor its related entities, employees or agents shall be liable on any ground whatsoever with respect to decisions or actions taken as a result of you acting upon such information.