If you’re a business owner, planning for retirement can fall down the list of priorities. With an ageing population and mounting costs of living, ‘super’ is an important consideration for all Australians, but even more so if you’re a business owner.
Put simply, successful super planning means you’ve made sure you have enough to live off when you retire. And by enough, we mean enough to be happy and sustain the lifestyle you want to lead in retirement.
Do I have to pay myself super?
If you’re self-employed, you’re not legally required to pay yourself super. In the past, some business owners would rely on the sale of their business to fund their retirement and not save regularly. But in today’s market, circumstances like market conditions or the economy can affect how much your business sells for, so it’s important to have a more reliable retirement plan.
What are the benefits?
The number one benefit of paying yourself super is that you’ll be saving for your retirement. Having more money in your super fund means you’ll be better equipped to retire and lead the life you want to lead.
And if lifestyle doesn’t get you saving your pennies, tax reductions should. There are some good tax benefits to paying yourself super. For the most part, contributing to your super can reduce the tax you pay on your income.
If you make super contributions before 30 June each year, you can claim a tax deduction in that financial year. For the 2015 financial year this is up to $30,000 annually (or $35,000 annually in the year you turn or if you’re over 60). You can claim this tax deduction until you’re 65 years old (sometimes even longer in certain circumstances).
To avoid penalty taxes, make sure you don’t go over the super contribution caps. Go to the Australian Taxation Office website to find out more about the super contribution cap
It’s never too early to plan for retirement.
Talk to us to arrange a consultation.
Love the blog? Subscribe to receive it fortnightly.
What do you think?