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    Categories: Financial Planning

Is super still the best place to put your money in 2017?

Despite the ongoing changes to super, it is still the best tax house to invest in.

Case study

Say you are in your mid-50s, earning $95,000 per year plus employer superannuation of $9,025, have a cash flow surplus of $10,000 a year and no debt.

Option A

You could invest the $10,000 in your own name and pay tax at 39% on the earnings.

OR

Option B

You could invest the $10,000 as a non-concessional superannuation contribution into your superannuation house, where the earnings will be taxed at 15%.

Now a new option

From 1 July 2017, you will have another option to invest the $10,000 as a concessional superannuation contribution in your superannuation house. You will lose $1,500 due to 15% contributions tax, but still have $8,500, invested in your superannuation house, where the earnings will be taxed at 15%.

 

Best of all, you get a tax deduction in your own name for the $10,000 you invested in your superannuation house, which will get you a tax refund of $3,900.

 

Say you are really smart and contribute your $3,900 tax refund as a non-concessional superannuation contribution into your superannuation house.

 

Your original $10,000 investment in your superannuation house, now becomes $12,400 in your superannuation house. This is a return of 24% in the first year!

 

Even with some changes in super legislation, it still seems to be a great investment option.

 

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Tony Rush: