What is Superannuation?
Superannuation is a good long-term savings plan, which will provide you with an income when you retire. For many Australians, super will be their main form of retirement income. It’s one of the major sources of tax effective investment vehicle in Australia as it is taxed at 15% only.
How does Super work?
Every Employer has to contribute 9.5 % into Superannuation compulsory apart from the salary which they are earning. This rate is set to increase gradually to reach 12% by 2020.To understand how super works, it's important to keep in mind that super is a framework for holding investment assets but it's not an investment in itself. Super funds can offer a range of investment options and asset classes that may include cash, property, shares and fixed interest. When you put money into your super fund and choose your investment options, you are actually buying units in these funds. The number of units you receive depends on the daily unit price.
What types of super funds are there?
- Employer/corporate/staff funds- these are funds established by an employer for the benefit of their staff. (Minimum contribution is 9.5 %)
- Personal funds - as the name implies, you personally join as an individual through a super provider. There are many available and most will offer a wide range of investment choices and other features.
- Industry funds - these were originally set up for people working in a particular industry, e.g. builders or health care workers. Many are now available to the public.
- Self-managed super funds (also called 'do it yourself' funds) - these can have up to four members and are generally used by people with larger amounts in super or by family groups.
When can I access my super?
- Generally, you can only access your super savings when you reach preservation age. This is to ensure your super savings are used for when you reach retirement.
When can I use my superannuation account?
- Reach preservation age and retire
- Reach preservation age and continuing to work
- Changing jobs on or after 60 years of age
- Reach 65 years of age.
How can a financial adviser help me?
Like all of us you want to know what the changing markets mean for you, your family, your savings and your future. That’s why it's a good idea to speak to a qualified financial adviser.
A financial adviser can help you assess your current financial position and work out whether you're in good shape to meet your personal and financial goals. The financial adviser will help you in the below following areas
- Building savings and investments
- Protecting your family and lifestyle
- Planning for changes in your life like the birth of a child
- Saving for your retirement