If you’re a doctor, you already know that putting money into a superannuation fund is a great way to reduce the taxes you have to pay. After all, contributions to a super fund is levied a personal tax rate of just 15%, as opposed to the 46.5% marginal tax rate that doctors pay. Furthermore, the contributed amount can be withdrawn upon retirement, thus providing practitioners a source of income in their senior years.
Of course, you can only enjoy the full benefits a super account offers if it is properly set up. Hence, be sure to avoid these common errors:
Not Starting Early
If you don’t already have a super account, now is the time to open one. The sooner you start contributing to it, the greater the amount you will accrue. Talk to a medical accountant about starting one as soon as possible.
Not Diversifying Your Investments
When you put money into superannuation, that amount gets invested and whatever gains it produces is reinvested right back. However, you do have the freedom to choose what things to invest in. Be sure to diversify your range of investments so if one asset class underperforms, you can rely on other investments to make up for the loss.
A lot of things can happen between now and when you retire, so be sure to update your records to reflect changes like a change of name (important for women who take on their husband’s name).