Category: Superannuation

If you are comparing super funds or thinking about how you can pay your own life insurance, you might want to consider paying your insurance through your super fund. 

Plus, it’s not just life cover/death cover that can be paid through super. Here are the three types of personal insurance you can choose to pay through your super:

1. Life Cover/Death Cover
2. TPD Insurance
3. Income Protection Insurance

Let’s take a look at the pros and cons of paying for a type of insurance cover through your superannuation fund.

How to Pay Your Insurance Through Your Super Fund

For any insurance to be paid through your super fund, you need to contact your fund first or make the changes online. Here are the steps you need to take to pay your life insurance through your super fund:

Contact your super fund or visit your online super fund member portal and inform them of the changes you want to make. At this point, it will determine whether or not it can be paid through your super fund. If your insurance can be paid through your super fund, you will be given a choice as to how you want your fund to be paid.

You can choose to pay the premiums directly from your super fund account or you can choose to have the premiums deducted from your salary. Work with your super fund representative to decide which option is best for you.

If you choose to pay the premiums from your super fund account, you will need to provide a valid bank account or account number.

Benefits of Paying Insurance Through Super

There are many benefits of paying your insurance through your super fund.

Pro #1: It can be tax-effective. By paying your insurance through your super fund, the money you pay for your premiums is pre-tax. This means your insurance premiums are paid from your pre-tax income.

Pro #2: Your Insurance Premiums may be cheaper. By paying your insurance through your super fund, you may pay cheaper rates and be able to enjoy package discounts (with multiple types of insurance). 

Pro #3: It can be easier. Having your insurance paid through your super fund can be a more simplified process and more convenient. Your personal details are already within your super fund, reducing the time spent on filling out a long form. It’s also paid for you on your behalf through your super, so you can have peace of mind knowing you’re covered. 

Disadvantages of Paying Insurance Through Super

While there are many advantages of paying your insurance through super, there are also a few disadvantages.

Con #1: It can be more expensive. Being able to pay your insurance through your super fund may only be worthwhile if you have accumulated a large super fund. It’s important to compare insurance prices and get the best deal for you.

Con #2: This may reduce your retirement savings. Paying insurance through your super fund usually means the premiums and fees come out of your super balance. This can lower your nest egg for retirement so it’s important to ensure you have e large enough super fund (or are even making additional contributions for your future).

Con #3: Your level of cover might not be enough. You could be underinsured if you choose insurance through your super fund. Many super fund insurance policies are only basic and may not cover you and your family for what you actually need. 

Make An Informed Decision About Your Finances with The Guidance From An Expert!

If you’re still unsure about whether or not you need insurance, you can seek financial advice in Hornsby through Hyland Financial Planning. We aim to help you reach your financial goals through strategic planning and unique solutions. 

Get in touch with us today to learn more.

Or Book a 15-minute FREE Call!

Your future retirement lifestyle is dependent on your savings – in particular your superannuation. 

Your super fund is a great way of saving for your later years in life. It can be easily forgotten about, but it’s important to remember that your super is money and will be an integral part of your retirement income once you reach preservation age.

You might have a pretty good idea of whether or not you have enough saved up through your superannuation fund, or if you’re going to need to make some extra contributions to your super. 

Here is a guide to how you can keep on track of your retirement savings through your super fund:

How Much Money Do I Need In My Super Account?

There are a few different ways you can calculate how much super you need to retire, as there is no “one size fits all” approach.

While your employer must pay 10% of your salary to your super (known as the superannuation guarantee) you may want to consider making your own contributions. If this is the case you should aware of the super contribution caps to ensure you don’t suffer the financial implications (e.g. the potential to pay additional tax).

The more money that goes into your superannuation account, the more it builds through the investment option you have chosen for the fund. If you have started retirement planning with your financial adviser, it may be beneficial to check with them how your super is being invested and if – in your financial situation – you can make additional contributions.

To learn more about super contributions, check out our article on The Different Types of Super Contributions You Should Know.

3 Simple Ways to Boost Your Super

1) How To Find Your Lost Super Funds

If you’re not sure how much super you’ve already got, it’s worth checking. If you’re starting your working life or you’ve had a few jobs, then it’s possible you may have a few accounts that you’re unaware of. 

This is particularly common if you’ve changed jobs over the years and you haven’t had your super details transferred over. Often the employer can create a new super account and make their employer contributions to that super fund.

You can find your super fund and check how many you may have through the Australian Taxation Office.

It’s important to keep on track of your super savings, so you know if you need to make extra voluntary contributions outside of what your employer pays to help build your savings. 

You may want to check which super fund is charging you the least amount of fees, and giving you the best performance, and ensuring your employer is paying to that super fund.

2) Think about Consolidating Funds

If you have multiple accounts you will want to consolidate. 

If you’ve got multiple super accounts, but you’re not paying anything into any of them, then you’re not actually saving any money. In fact, you may be limiting your saving potential by having these multiple accounts as they could be charging you fees.

It can be a smart idea to consolidate your super funds into one account. Not only does this give you easier access to your money, but you won’t be paying duplicate fees (and in some cases, multiple insurance premiums). It’s important before consolidating your super to check the relevant product disclosure statement so you can choose the fund that’s meeting your personal objectives.

This can also help make it easier to keep track of your super savings, which can make it easier to stay on top of meeting your saving goals and positively affect future performance.

It may be helpful in this circumstance to seek personal financial advice, so you can make an informed decision regarding your super fund and ensure your receive the investment returns that are needed to meet your financial goals.

3) Look at Other Investment Options for Your Super Fund

If the level of returns you’re making on your super balance isn’t meeting your savings target, then you may either want to change to a higher-risk investment portfolio (depending on your timeframe) or you may want to look at other investment options.

As you get older and closer to your retired years, you may want to limit the risk you’re willing to take with your super. Instead, you may want to explore other investments that you can make outside of your super.

If you’re looking for higher returns, consider some growth options, such as investing in shares or property. There are many long term investment opportunities that can help you grow your savings.

Seeking Personal Financial Advice About Your Superannuation Fund?

To ensure that you have enough super to live a comfortable life in your future, you need to know exactly how much you have, as well as an estimate of how much you’ll need ahead of time.

If you want to learn more about your super, and want to begin your retirement plan for your financial future, you may want to seek expert advice. Hyland Financial Planning offers financial advice in Hornsby to help you calculate everything as you build your super.

Get in touch with us today to learn more.

Or Book a 15-minute FREE Call!

A tax-effective way to grow your savings for your retirement can be by making your own personal contributions to your superannuation. When it comes to your super it’s important to make the most of it during your working years, so you can provide yourself with the best possible financial situation for your golden years. 

However, just like anything tax and money-related, these things can get pretty complicated, causing you to get lost in all the jargon and complicated strategies. You may not be aware of the contribution limits and restrictions in superannuation, and if that’s the case, it’s beneficial to get yourself familiar with it.

By planning ahead for retirement, you can ensure you are making the right decisions about your super that will benefit you most in the long term. 

Speaking with a financial adviser can provide you with the right guidance, especially when planning for your retirement. 

In this article, our team of experts created a guide that will help you navigate through the different types of super contributions. Here’s what you need to know about the 4 different types of super contributions you can make:

The Different Types of Super Contributions

Type #1: Concessional Contributions:

Concessional contributions are contributions made from your pre-tax income to your super. This type of contribution is taxed at 15%, which is typically lower than your marginal tax rate. This generally allows you to pay less tax while boosting your retirement savings. 

How can I make a concessional contribution?

You can ask your employer to pay part of your pre-tax pay into your super fund, which is known as a salary sacrifice method. This simply means, your employer will be paying more than the super guarantee, which is currently 10% of your gross salary, in exchange for you receiving less take-home pay – but also benefiting from paying less tax.

What is the limit to making concessional contributions?

You can currently contribute up to $27,500 per financial year through your combined employer and salary sacrificed contributions. 

It may be beneficial, as you start to contribute to your retirement, to speak with your financial adviser to see which type works best for you and how you can maximise your contribution opportunities for your personal circumstances. 

Type #2: Non-Concessional Contributions

A non-concessional contribution is a type of contribution that you can make to your super from your after-tax pay. These types of payments aren’t taxed when they are received by your super fund as you have already paid income tax on this money. 

How can I make a non-concessional contribution?

It can be effective if you have spare money to contribute to your super, where it will be invested on your behalf through your super fund. You can easily make non-concessional contributions directly to your super through your super fund or by going through a financial adviser.

What is the limit to making non-concessional contributions?

You can currently make up to $110,000 of non-concessional contributions to your super each financial year. It’s important, however, that you do not exceed this cap within the financial year or you will have to pay an additional tax/fee.

You can learn more about making a non-concessional contribution through the ATO or by asking your financial adviser. 

If you would like to make voluntary contributions, it can be useful to contact a financial adviser to achieve the most effective financial outcome for you. 

Type #3: Spouse Contributions

Another effective way to reduce your tax can be by making non-concessional contributions to your spouse’s super fund. You can benefit by:

• Helping your other half build their retirement savings
• And you also may be eligible for a tax offset. 

Am I eligible for the spouse contributions tax offset?

If you want to take advantage of the tax offset when making a spouse contribution, you should check to see if you meet the eligibility criteria:

• You must make a non-concessional contribution to your spouse’s super.
• You must be married or in a de facto relationship
• You must both be Australian residents 
• The receiving spouse must be under 67 or meet the work test requirements

Spouse contributions can create additional opportunities for both you and your other half.   Besides that, doing so also maximises the level of retirement savings that you and your spouse have to share.

Type #4: Downsizer Contribution

As part of the 2021-22 Federal Budget, from 1 July 2022 eligible individuals aged 60 years or older can make a downsizer contribution (currently, the required age to make a downsizer contribution is 65 and above) 

This type of contribution can significantly boost your retirement savings, as it allows you to make a tax-free contribution to your super of up to $300,000 using the proceeds from the sale of your home. 

Often individuals nearing retirement may choose to downsize their home to make it easier for them to maintain during their retirement. This contribution strategy is a great way to do that and still enjoy financial security. 

Am I eligible for the downsizer contribution scheme?

To make a downsizer super contribution, you must:

• Be aged over 65 (changing to over the age of 60 from 1 July 2022)
• Have owned your Australian home for a minimum of 10 years
• Have not previously made a downsizer contribution
• Provide your super fund with a ‘Downsizer contributions into super form’

Seek a Financial Adviser to Help You Make the Most of Your Superannuation

Retirement planning experts can help you grow your super and ensure you are on track to achieving your retirement goals. They can help you choose the right options to boost your savings, while tailored to your personal circumstances. To improve your superannuation balance, it’s important to start early!

How Can We Help You?

If you’re planning for your retirement and need help managing your super contributions, work with Hyland Financial Planning’s expert financial advisers in Hornsby. 

Hyland Financial Planning aims to build a collaborative partnership with clients to help them improve their wealth through strategic planning and creation. With our help, we’ll guide you through navigating your finances to help you reach financial freedom.

Book a complimentary 15-minute chat with one of our experts today to find out how we can help you achieve your financial goals!