I was chatting to a client the other day – best part of my job really.  I get paid to sit and talk to people about their future, their dreams and hopes.  Seriously, how lucky is that!  Anyway, we got onto the topic of superannuation, something I have a bit of a nerdy passion for.  Do you know how media is reporting that everyone thinks that superannuation is a tax break for the rich?  Well guess what, damn right it is!  Where else can we use pre tax dollars (ie, your income BEFORE the ATO takes their bit out) and then use those pre tax dollars to buy any assets we want (shares, property, gold, oil etc etc).

When we own it, the most tax we’ll pay on any income will be 15% (much much lower than the average tax payer), but often it will be as low as 0% if you’re smart about it and use franking credits, depreciation and the like (and I’ll spend some time on a whole other blog post about gearing in super).  And then, when it’s time to sell it, wait until 60, convert it to a pension and pay ZERO tax on the profits.

 

 

So, pre tax going in, lower tax while it’s there, and no tax when it’s time to take your money and run.  If that’s not taking the pi** then I don’t know what is.  It’s funny though, about 60% of people I meet couldn’t care less about superannuation and it’s one of the best things going.

Use, abuse and be happy!