Super and pensions: what are my options?
Monday, February 23rd, 2009
Given what’s been happening in financial markets recently, most people with superannuation or pension investments would have seen their account balance fall in value.
If this has happened to you, we understand you may be quite worried at the moment. So here are some things people at different life stages could consider:
People who are ten or more years away from retirement
It’s important to keep in mind that super is a very tax-effective place to invest.
This is because:
- investment earnings are taxed at a maximum rate of 15%, not your marginal rate which can be up to 46.5% (includes a Medicare levy of 1.5%), and
- you can receive a tax-free income at age 60 or over.
You also need to remember that super is a long-term investment. This is because you are investing not only for the ten or more years until you retire, but the 20 to 30 years you could spend in retirement.
