Superannuation

Superannuation is a form of savings, where money is set aside by you and/or your employer and invested for you to access upon retirement. It is an ideal way to invest money for your retirement. Many funds also pay out benefits in the event of death, or if you are unable to work due to illness/accident.

Your retirement savings grow because money is paid into the fund regularly and invested at a concessional tax rate. Current tax concessions and other government benefits make superannuation a favorable long-term investment. Money from your superannuation account can usually only be withdrawn at retirement.

Compulsory superannuation contributions have been in place since 1992. Employers are required to contribute at least 9.50% of your salary into superannuation.

You can make additional contributions into superannuation in the form of salary sacrifice, personal contributions, government contribution and spouse contributions. It is important that you do not exceed any concessional and non-concessional contribution limits.

In order to grow your superannuation and make your superannuation work for a great retirement, it is important that you:

  • Do not have lost super. If you have had more than one job, moved addresses and even changed your name, it is always a great idea to find your lost super money.
  • Make sure your superannuation is consolidated and you are making your hard earned money work together rather than have a different set of fees and different investment options that don’t match your overall risk profile.
  • Ensure that your investments are invested correctly. Contributions paid into a complying superannuation fund are typically invested in a range of assets such as cash, fixed interest, property and shares. You must choose an investment option that is best suited to you. This depends on the time frame and your appetite for risk. Investments in shares and property generally provide a higher return over time, however, are more risky. Investments in cash and fixed interest generally provide lesser returns, but provide stability to your investments. Having the wrong investments, or not investing in accordance to your time frame can cost you a lot of money and it is very important that you make these changes to ensure that you benefit in the long term.
  • The rules and laws governing superannuation are continuously changing. These dynamics can create frustration with individuals. It is advisable to talk to a Financial Planner to develop a superannuation strategy that will build a healthy and stress free retirement.

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