Guided Investor

Superannuation Hacks: Unlocking the Potential of Your Retirement Savings

Today we explore three incredible superannuation hacks that will revolutionise your financial plan. These hacks are often overlooked, but once you discover them, you’ll be able to supercharge your superannuation and maximize its benefits. Get ready to unleash the true potential of your retirement savings!

Hack 1: Superannuation as a Structure

First things first, let’s debunk a common misconception. Superannuation is not an investment itself; it’s a structure, much like a trust or a company. Think of it as the foundation that holds your investments. Understanding this distinction is crucial because it empowers you to make the most of your superannuation.

Many people dismiss super as a bad investment because they believe it offers limited and confusing investment options. However, with the right structure, you can hold a diverse range of assets within your super. From traditional investments like shares, term deposits, and bonds to unconventional choices like crypto, property and artwork, your super can be customized to match your preferences. Of course, there are rules regarding the use of these assets, but with the right knowledge, you can navigate these regulations and make super work for you.

By viewing superannuation as a structure and tailoring your investments accordingly, you unlock a world of possibilities and leverage the benefits it offers, such as tax planning.

Hack 2: Superannuation’s Tax Advantage

Super provides unparalleled tax benefits that is why it is today’s second superannuation hack. It’s the most tax-effective structure available to you, as it offers a tax deduction for investing for yourself. Let’s illustrate this with an example.

Suppose you decide to invest $5,000 in XYZ stock. Now, the crucial decision is whether to purchase the shares in your own name or through your super. If you opt for your name, any future income or capital gains from the shares will be taxed at your marginal rate, which can significantly impact your returns.

However, if you choose to buy the shares through your super, you can contribute $5,000 to your super fund, claim a tax deduction for this amount as a personal deductible contribution, and then purchase the XYZ shares via your super. As a bonus, any dividends or capital gains from those shares will be taxed at a maximum rate of 15%, offering a much more favorable outcome. Essentially, you not only obtain a tax deduction for purchasing XYZ shares but you also minimise future tax implications.

Remember, there are factors to consider, such as the tax on concessional contributions and contribution cap limits (refer to ATO site for more information). Additionally, your money is generally locked in super until you meet a condition of release. It’s essential to familiarise yourself with these rules, but once you do, superannuation can be a fantastic tax-effective vehicle for long-term investments.

Hack 3: Eliminate Capital Gains Tax

Hold on to your seats, because here comes the grand finale – the ability to pay no tax on accrued capital gains. Capital gains tax (CGT) is the tax you incur when you sell an asset for more than its purchase price. But guess what? In superannuation, you can eliminate CGT altogether through what’s called an account-based pension.

During your working years, as you contribute to super, you’re in the accumulation phase, subject to a maximum tax rate of 15%. However, when you reach preservation age, retire, or turn 65, you can convert your super from accumulation phase to an account-based pension.

This magnificent account-based pension becomes a 0% tax entity. Yes, you read that right – zero tax on any income or capital gains generated within the fund. Franking credits are refunded as additional income, and withdrawals are also tax-free. But wait, there’s more! By transitioning an asset from accumulation to pension phase and selling it while in pension phase, you can completely eliminate any accrued CGT liability.

Imagine the possibilities! For example, you may purchase an investment property in accumulation phase for $500,000, later transition it to an account based pension when the market value is $800,000, sell it down in pension phase and bask in the $300,000 tax-free capital growth. It’s truly remarkable.

Did you love these superannuation hacks?!

And there you have it, three mind-blowing superannuation hacks that will transform the way you perceive and utilise your retirement savings. Superannuation is not just an investment; it’s a powerful structure that opens doors to diverse assets and tax advantages. By understanding these hacks and their implications, you can embark on an exciting journey towards financial freedom.

We hope you’ve learned something new today, and we’d love to hear your thoughts. Share your experiences, questions, or additional hacks in the comments below. If you want our help to develop a Tailored Financial Plan, please reach out. Remember, the world of superannuation is full of surprises, so keep exploring, keep learning, and enjoy the incredible benefits it offers. Cheers to a prosperous retirement!


The information in this website is for general information only.

It should not be taken as constituting professional advice from the website owner – Guided Investor as Authorised Representative of Symmetry Group (AFSL 426385)

You should consider seeking independent legal, financial, taxation or other advice to check how the information relates to your unique circumstances.

Guided Investor is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by use of this document.

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Brad Buters

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