Superannuation is one of Australia's favourite ways to save for retirement.
It allows us to save and invest in a tax-effective manner. Then in retirement we can have up to $1.6 million in super generating income for us tax free. Sounds great, right?
Everyone's financial situation is different, so it would probably be best to sit down with a financial planner to help you make a plan.
If I were near to the age that I could access super I would want to add a lot more than I am right now. The superannuation rules are less likely to change substantially in the shorter-term compared to the longer-term. The tax savings are definitely worth it.
Paying tax at just 15% on your earnings is much better than paying more than 30%, but you need to make sure you're not handing over tons of fees to your superannuation provider. We saw in the royal commission how badly some providers were treating clients.
Indeed, the attractiveness of super has steadily reduced over this decade. How do we know it won't worsen? For a younger Aussie like me, I can't imagine that the superannuation rules will be anywhere near as good when I turn 70.
Why I don't add extra money to superannuation
We have much less control over our superannuation money. Unless we reach retirement age we can't access it unless we suffer incapacity, severe financial hardship, medical treatment or have a terminal medical condition.
I like the idea of possibly retiring well before I'm 65. Superannuation won't help me, which is why I'm doing a lot of my investing outside of super. It will cost me a bit more in tax, but I have a lot more freedom with my money and I'll also have more investment options.
There are plenty of businesses on the ASX focused on helping people with their wealth and retirement like Challenger Ltd (ASX: CGF), IOOF Holdings Limited (ASX: IFL), Netwealth Group Ltd (ASX: NWL), Hub24 Ltd (ASX: HUB) and Bravura Solutions Ltd (ASX: BVS).
I'm focused on growing my non-superannuation wealth by focusing on the best growth shares on the ASX.
