5 Things to Know About the Superannuation System

Things to Know About the Superannuation System

Superannuation or “super” is the money set aside while employed to support your financial needs after retirement. In this, your employers add a percentage of your salary into a super account, and your super is further invested into different assets to help you grow your account to enjoy the best possible outcomes after retirement. 

When you start a new job in Australia, either you can opt for self managed super funds or allow your employer to choose a super fund. Within time, it keeps on growing as long as you are working and becomes your biggest asset.

Things to Know About the Superannuation System

Here are certain essential things you should know about super to help you understand it better.

Who Actually Pays for Your Super

Let’s get this straight; your super savings are built up throughout your working life, as the salary you earn is split and put into your super account. If you are eligible and over 18, your employer places 10.5% of your regular earnings (and not over time) into the account. 

Luckily, you also have permission to make voluntary contributions to your super account to strengthen your retirement savings further. Though, there is a limit to the amount you can deposit each year. 

Where Is Your Money Invested

Another thing you must know about is where your fund’s trustee probably invests your money. Investments can be made into shares, real estate, and other assets. 

The choice of investment can be yours or your employer’s. You can ask your employer to invest in a portfolio as per their choice, or you can examine different portfolios and choose for yourself. 

Self managed super funds are private super that you manage yourself where you choose the investments and the insurance. 

Where to Check Your Super 

In most scenarios, you can check your super fund balance online via its website or go through the statements shared with you. The “employee superannuation guarantee” calculator on the Australian Tax Office website lets you know whether you are eligible for super and whether your employer is paying the correct sum on time. 

If, by chance, the tool shows your super is not adequately paid by your manager, you can print a summary and discuss the issue with them. 

At What Age Can You Withdraw the Super 

The government has set specific rules for people to access their super, which usually won’t be until they have reached the age of 55 and 60 or are officially retired. 

During this moment, it’s up to the person how they choose to take the money – lump sum, income stream or a combination of both. Though, particular conditions allow you to withdraw super early. They are typically related to specific medical problems or financial issues – eligibility criteria for both will differ. 

How to Take Control of Your Funds 

As mentioned above, self-managed super funds (SMSF) give you more control over your super. It is a fund set up by family or married couples to store their contributions. The tax office controls the SMSF, which includes a maximum of four people. 

In general, superannuation is a way to save for your retirement. It is a great way to ensure financial security after you stop working. So, you should not ignore it and pay full attention to your super. 

It is quite beneficial, especially when the time comes when you can no longer work. A super seems like an excellent choice to enjoy a good standard of living after retirement. 

The choices you make in your super today will make a big difference in the future. 


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