Investment in retirement funds helps the Australian citizens to save money for their retirements. It is a tax-saving scheme introduced by the Australian government to promote investment practices among the youth. The scheme allows people to save something for their retirement, from their present earnings. It makes them able to survive on their own in older years.

If you decide to possess a personal SMSF fund for yourself, here are some key points, that can help you understand the whole concept better:

Contribution by Employer

The process of SMSF starts with the investment by the employer. Every employer who is paying more than $450 to his employee, needs to contribute 9.5% of the total salary to a fund named SFSF.

If any employee wants to invest more than 9.5%, he can ask for the same to his employer at his own will.

Investment in various Assets

Money invested in your SMSF account is then invested in various money market assets such as shares, debentures, etc, for better returns and interest.

You can manage these assets at your convenience by choosing the required assets or may hire some professional in Paramatta to handle the account for you.

NOTE: Even if some SMSF accountants are managing the assets for you, the ultimate responsibility of taxation and account remains to you only.

Benefits on Retirement

Investing at the time when you are earning is much easier than investment in later stages of life. Having a source of income in the times when you are not earning makes you financially independent for your survival.

As the retirement phase starts, there are extra benefits and deductions on the income of the eligible investments. By having invested funds, you can avoid old-age pension for your existence.

Tax Savings

These funds are tax saving, as at the time of investment the amount invested in these funds is tax-free. Also, at the time of maturity when amounts are taken out of the fund, they are taxed at a concessional rate of 15%. All the earings of the finds are also taxed at a concessional rate. In this way, you can save a lot by investing in these funds.

In Paramatta various tax consultants and accountants can provide you with more information regarding other tax saving schemes and tax-saving eligible funds.

Annual Audit

SMSF funds are called self-managed super funds because they are managed by the person himself. If you want to hire an accountant for taking care of making the legal matter of the account you can take help from a professional.

One thing that should always be kept in mind is that all the accounts of the funds are required to be checked by an independent accountant every year. By having a yearly independent audit, a person makes sure that all the tradings in the accounts are as per the rules and regulations of the government.

Conclusion

When a person is young and earning, he might not feel the necessity of investment and savings. But as soon as, he enters the old-age, his productivity gets decreased day by day. Understanding this concept of the life cycle, the government provides tax saving schemes such as SFSF so that youth starts saving at an early stage of life.