I have $150,000 in super and I retire in 7 years. How do I grow my super?
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By sitting down with a financial adviser there are several things that you can consider to help grow your super over the next 7 years. A financial adviser needs to understand you financial situation and your risk profile (understanding the type of risk you would be comfortable with to invest your money) to ensure that you meet your goals and income needs for retirement.
The things that come to mind are:
Concessional Contributions: This financial year (16/17) you can contribute up to $35,000p.a.(pre-tax dollars), this does includes your superannuation guarantee contribution from the employer. If you have the cash flow you can top this contribution up by salary sacrificing up to the limit. Next financial year (17/18+) the maximum for the concessional contribution will decrease to $25,000p.a..
Non-Concessional Contributions: This financial year (16/17) you have the opportunity to contribute up to $180,000 (after tax dollars) in one year or you can bring forward 3 financial years in advance and contribute up to $540,000. You do need to be careful with the change in contribution caps if you are unable to maximise the full 3 years in this financial year because next financial year (17/18) this will also change and be decreased to $100,000 in one year or 3 years in advance up to $300,000.
Understanding your Risk Profile: There are a range of different risk profiles that help you invest money in superannuation eg. low risk profiles, medium risk profiles and high risk profiles. This exercise help us understand what you would be comfortable with and helps us provide you a guide to what we believe your money would be worth in 7 years time for your retirement. We tend to find as clients close in on retirement that they become more conservative with their risk profiles to ensure that their life savings are going to last for the next 20-30 years to provide for their retirement.
Power of compounding your returns: Over the next 7 years to maximise your investment opportunities if possible continue to contribute as much as you possibly can to your superannuation investments and reinvest your distributions, this will help you accumulate more units within your fund and help maximise potential returns. It’s amazing how the one percenters can make a huge difference to the end result!!
Andrew from our office in Beenleigh offers an obligation free first interview to ensure both the client and the planner are comfortable with each other. Although there are many more steps in construction of a financial plan this one is potentially the most important.
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