BEWARE OF THE SOLE PURPOSE TEST
Your fund must be maintained for the sole purpose of providing retirement benefits to members, (or to their dependants if a member dies before retirement).
If you contravene the sole purpose test, the fund may lose its concessional tax treatment, and the trustees could face civil and criminal penalties.
So you will need to make sure your property investment satisfies this purpose.
BEWARE OF THE ILLEGAL SCHEMES TO GET EARLY ACCESS
These usually involve transferring your balance from your existing super fund to a self-managed super fund (SMSF).
SMSF’s are of course totally legal but the promoters of the early access schemes will tell you that you can then access your super to pay off credit card debt, buy a house or car, even go on holiday.
Beware - these schemes are illegal, usually involve high fees and commissions, and may expose you to further fraud and identity theft.
All the figures on this page are ‘in today’s dollars’ which means they’ve been adjusted for inflation.
And it makes a big difference: save $500 per month for 35 years at 5% p.a. and you’ll end up with $570,913. Hooray! Job done! …except that in 35 years inflation will erode the purchasing power of that money and it won’t buy you the lifestyle it would today.
That’s why these figures - and the calculators we link to - must and do adjust for inflation.
This is one to think about before 30 June. If you need to borrow to contribute $1,000 to invest in your superannuation, in order to receive the $500 Government co-contribution (and you’re confident you can pay the loan off quickly) it may be worth considering.
BUT WAIT, THERE’S MORE…
Up until 30 June 2017, if you earn less than $37,000, the government will also make a 15 cent 'Low Income Super Contribution' for every dollar of concessional super contributions (that is ‘super guarantee’ contributions by your employer and/or ‘salary sacrifice’ contributions by you from pre-tax earnings) — up to another $500 co-contribution.
…subject to the same eligibility rules about work earnings, age, and residency.