Inspirational Case Studies
Other retirement myths
Super is heavily taxed, isn't it?
Wrong. Superannuation is considered one of the most tax-effective investment vehicles you can access. You can invest from pre-tax income, whereby contributions may attract a tax rate less than your marginal tax rate. You receive concessional tax rates on earnings within the super environment and enjoy tax-free income from age 60.
Retirement means I have to stop work?
Wrong. Just because you retire, it doesn't mean you need to stop working entirely. If you don't feel ready to fully retire, financially or emotionally, then working part-time could be an option for you - there is no age at which you need to stop working. But the benefit of getting older is that you can access your superannuation and enjoy tax breaks on your income and earnings.
I can't access my super until I'm 60
Wrong. Australia's super laws allow a person aged 55 and over to access their superannuation provided they have terminated an employment arrangement and retired from the workforce. In addition, if you're 55 or over, you may be able to draw a Transition to Retirement pension, even while still working. (link to TTR story).
Superannuation is a risky investment?
Superannuation is not an actual investment itself, it is a structure or vehicle that allows you to invest in assets that you could otherwise invest in your own name - the benefit is that it provides generous tax concessions. Therefore, you can help control your risk by spreading your investments across different assets. The idea is to reduce the impact that any one of your investments would have on the total value of your investments, should it perform badly. Assets move in different economic cycles so when shares do badly, bonds or property might do well or vice versa. (link to risk management story)
If I put more money into super, I'll just lose more!
When you invest in superannuation, you're buying units in a fund, the value of which rises and falls daily with the share market (or other assets in which the fund invests). While not an indicator of future performance, history shows that riskier assets such as shares experience more highs and lows in the short term. But over time, the risks may diminish and shares and other growth assets like property in which super funds invest may do better than cash and fixed interest, helping to build your wealth. And, if you are not comfortable investing in shares and property, you can still own a superannuation fund that is invested in more conservative assets such as cash and fixed interest investments.
