I got some "incorrect" financial advice and ended up paying almost $2300/month on Insurance premiums within super. This has eroded the super balance considerably. I'm now in my late 30's. How can I recover?
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I’m sorry to hear that you have received bad or incorrect advice based on your wealth protection and general financial planning goals. The positive is that as you are only in your late 30’s, there is certainly time to recover.
One way to tax-efficiently increase your Super is through salary sacrifice contributions. The new contribution limit from July 2017 is $25k per annum and this includes your employer’s mandated contributions. Keep in mind that salary sacrifice is taxed at a Fund level at 15%, so you would want to be confident that your personal marginal tax rate is at least higher than this level.
You also have the ability to make after tax (or non-concessional) contributions to Super, should you have some surplus funds lying around. You again need to keep in mind that you won’t have access to these funds for a long time (probably at least 20 years).
You can also restructure your insurances so that you have a lower benefit, consider alternative providers, or hold the policies (even partly) outside of Super - all of which will lead to a lower premium cost to your Super.
Another option is to take a greater exposure to ‘growth’ assets in your Super which should provide a higher level of long term returns, however you need to be comfortable with greater volatility levels in the short term.
If you wish to discuss further, please do not hesitate to contact me.
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