It’s likely that you’re already aware that people can put money into their super up until they reach 67 years, and probably already do so yourself. But did you know that you can put money into your children’s superannuation for them, if they are under 18 years old?
One of the advantages of doing this early on is that that money will accrue until your child reaches their preservation age, which will help them with their retirement. Additionally, the compound interest that superannuation funds with as little as $5,000 for example, accumulating at 7% per annum until the child reaches their preservation age could increase exponentially.
Compound interest on these superannuation funds could assist them year after year with increased gains and profit.
With that previous example of a child’s superannuation fund of $5,000, if that amount of money accrued interest at the 7% per annum interest rate over 55 years, the result could be that that amount in the super fund may total over $200,000.
This idea is not always suited for everyone. The funds to start the super account need to be readily available, and for many people that might not be an option. If the money is available through other investment opportunities (i.e. a grandparent wishing to leave their grandchildren money), this could be a means through which that money is tucked away, ready for their superannuation
If you’re looking for a way for your children or grandchildren to be looked after when you are not around, investing in superannuation is a smart way to look towards the future.
Seek further information and advice from your accountant about what we can do for you to get this started.