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Why invest in superannuation?
Superannuation is simply a way of investing designed to help save for retirement. By making it a very tax-effective investment vehicle, the government is shifting the onus onto us all to take greater responsibility for funding our retirement years. A broad choice of asset classes to invest in, possible insurance inclusions, recently simplified rules and various taxation incentives make it an attractive investment option.

Read more about how you could help your superannuation grow and how much superannuation you might need.

Super tax-effective
When you invest in superannuation via salary sacrifice or employer contributions, you use pre-tax dollars. This money is only taxed at 15%, which is likely to be much lower than the marginal tax rate you pay on your income (which can be up to 46.5%).

Additionally, investment earnings and capital gains on superannuation are taxed at a maximum of 15% and 10% respectively, which compares favourably with the taxation of other investment earnings and capital gains outside the superannuation environment. The graph below illustrates how investing in super may maximise your long-term income.

Affordable insurance protection
Normally, when you take out life and/or total and permanent disability insurance, you're using after-tax money. It costs less to use pre-tax dollars by paying for insurance out of your pre-tax superannuation contributions..

Need to discuss your options with an expert?
Tax on superannuation can be complex, especially in light of recent amendments to the law. But to better understand the implications and impact of these new superannuation rules, especially for anyone nearing retirement, why not consult a Westpac Retirement Specialist, who can provide you with strategies tailored to your individual circumstances?

Read more about how you could help your superannuation grow and how much superannuation you might need.