Most people aren’t aware of the fact that their superannuation fund has an earnings tax rate of 15% applied to the income. For example, if you have $500,000 in super, and have investment earnings of 5%, you will have to pay tax of $3,750 (15% x $25,000). This happens ‘behind the scenes’ and is automatically deducted by your superannuation fund.
In preparing for retirement, a common strategy is to downsize the family home to a smaller and lower cost home. By selling and purchasing a lower cost, smaller house, and pocketing perhaps $100,000 to put into your superannuation, you could benefit from drawing an additional income of circa $8,000 pa. in retirement.
Dallas Davison, Michael Hogue and Ali Hogue.