Are you a baby boomer? Then perhaps you might benefit from this string of expert SMSF advice for people on the brim of retiring.
As the last of the baby boomers have turned 50, experts believe that a substantial part of that demographic are still uncertain about their financial future. That said, many SMSF experts and financial gurus still subscribe to the idea that they still have that window to secure their finances and live off their retirement years in financial bliss and peace.
If you are a 50-year old baby boomer and you won’t be able to access your pension until you are 69 or 70, then you have that huge two-decade window to maximise and take advantage of the very generous tax rules and incentives offered around Super.
Many financial gurus said that 50s tend to be the peak earning years for most individuals. Most of their children are now financially capable and expenses are no longer high compared to what they used to spend a decade ago. As soon as you turn 50, it is vital that you make extra deposits into Super within that next 20 years. The compounding investment returns you can possibly benefit from will be humungous.
You also have to review your expenses and see what items you can get rid off. Get expert SMSF advice from certified practitioners and see how you can build your Super, enjoy tax exemptions, and plan investment strategies that will cover you financially into your retirement years.
Be honest with the tax man
While baby boomers and other certain individuals do enjoy some taxation privileges, you need to understand that you do not want to battle with the tax man.
The Australian Taxation Office (ATO) has intensified its drive to ensure that proper taxes are paid, especially now that baby boomers are entering the retirement phase. The aim of the government is to ensure that the tax dollars SMSF trustees earn is to ensure that they cover the retirement costs and not as a means to hoard more money.
Simply put, the ATO will chase you if they find something wrong with your tax records and they won’t rest until the matter is resolved.
Again, it is imperative that SMSF trustees know what they are getting themselves into and if they do not have the knowledge and the skills, getting a certified SMSF adviser can make the difference.
While being a young baby boomer may give you an ample opportunity to build your fund, it is still wise that you understand that you need to be in control of your expenses when regular income is still streaming in. That is because you cannot live a grand champagne way of life when all you can afford is a few bottles of beer.