Hi guys,
I just moved back to Australia after working overseas for years. As a result, basically I have little money in my super account. I am thinking of planning for the future. Here are three options: high savings bank account, term deposit, and super account.
High savings bank accounts are very tempting because of the interest rate, but I doubt the high interest rate will last for a long time. The perk of term deposit is that the high interest will stay unchanged until the mature date. The third option is to open a personal super account and put some money into the super account. BTW, I still have to work more than 30 years to claim the pension.
Do you have any suggestions? Any suggestions are welcome. Thanks.
High Savings Account, Term Deposit or Super Account
Lnned2say on 08/06/2023 - 13:29
Comments
thank you, Seraphin7
super account - This gives you tax benefits. however it also locks in the money until you meets the conditions as mentioned above.
if you have >A$50k , might be worth taking to financial planner / accountant.Thanks, apple2016
Depends on your tax rate.
If you have less than $500k super balance you can use 5 year catch up. You could in theory put a bit more than $125k into super gross.
Popular theory is:
- Rainy day fund
- Some investments on top of that
Super salary sacrifice if you are at high enough tax rate.
Thanks netjock
If you want to buy a house one day, it’s probably best to put into super for the FHSSS and tax benefits.
That’s a good point, thanks Ghost47.
Keep in mind that super is essentially invested asset classes like stocks, bonds, property, cash etc. Depending on how the global economy goes your money could go backwards in the medium term, so it can be a bit risky to put it in super as well because of that.
If you want to save for the long term and avoid CGT, then Super is your option.
But super is meant for retirement only - not as personal wealth improvement fundBasically, it is for my retirement even if it is a long time to go. Literally, I have no money in my super account. I am a bit concerned that I cannot support the life after retirement.
In this case, I second what netjock said upthread. I'd open up a vanguard super account and drop 127.5k into its international shares option which essentially mimicks their very successful VSG ETF. This would help you claw back some of your lost years. The compounding after 30 years will be significant - to say nothing of any additional contributions you make over the next three decades.
The best time to do this, however, would be after you've earned a salary of at least 127.5k because catch up contributions are also tax deductable, which would result in a very healthy tax return that year.
Start with Ubank
forget termdeposits for the time being.
find our leaderboard but beware WHEN interest is paid
get a govt job, earn too much for doing too little?
Super account locks up money until you meet a condition of release … sounds like this is 30-odd years away for you, so really not comparable to the other two.
On savings account vs. term deposit and locking in rates … unless you are talking a very large amount of money, or you're prepared to go for a term greater than 12 months, it's unlikely that you'll get a material difference in outcome.