Since my two daughters completed year 12 and commenced uni,I’ve made a point to gift them $1,000 each year to contribute to their super.
One of them is very focused and a great saver, but the other … she seems to be doing her best to stimulate the economy. I’m sure other parents would understand.
Why do I do it? There are a couple of simple reasons.
First, the Government provides a co-contribution of up to $500 — that’s essentially a 50% return straight away. You can’t beat that.
Second, starting early means they benefit from compounding over time. Even small contributions now can make a big difference to their long-term wealth. My colleague, James Weir, has written about the importance of investing early and magic of compounding returns.
The low income super co-contribution is something that often gets overlooked, but it can be a great opportunity. It’s available if you meet certain criteria — including earning under $47,488, having at least 10% of your income from employment, and lodging a tax return.
Contact us today
If it’s something you think could work for you or your family, speak to your adviser.
It’s important you get it right.