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Superannuation

The Australian Taxation Office has released its latest data on lost and unclaimed super, revealing a whopping $11.7 billion sitting in lost Superannuation accounts.

 

What is Superannuation?

Superannuation is a way to save for your retirement. The money comes from contributions made into your super fund by your employer, and ideally, topped up by your own money as well.

Your employer must pay 9.5% of your salary into a super fund. This is called Super Guarantee and it is the minimum. The Super Guarantee is expected to gradually increase to 12% in coming years based on current legislation. Super is a lifetime investment that has many benefits.

 

What are the benefits of Superannuation?

Your super is the key to having enough money to live comfortably in retirement. Superannuation is payable on your base wage at the government guaranteed rate of 9.5%.

There is a 15% 'contributions tax' on EVERY pre-tax voluntary/employee contribution and there are methods and strategies to avoid paying as much tax, but you need to speak to a professional to find out how as it is not automatically set up.

There are options available to make your Superannuation work more efficiently, another reason to speak with a consultant from Financial Advisers Australia.

 

How does Superannuation work?

1. Start planning now

Even if your retirement is still a long way off, it pays to start building your super sooner rather than later. You might be surprised at how a small increase to your super now could have a big impact in the long run. Let us show you how.

2. Find your lost Super

If some of it is yours, it’s important to get it now. After all, it’s your money, and once you retire you’ll need it. Fortunately, it’s never been easier to find your lost super: just go online to the ATO’s SuperSeeker tool and register. All that you will need is you Tax File Number and other information to prove your identity, such as your bank account details and the details of your current super fund.

3. Consolidate your Super

By consolidating your Superannuation accounts, you will benefit from one administration fee instead of multiple and other Superannuation running costs. By not consolidating you run the risk that fees will eventually leave you with no Superannuation money.

4. Make extra contributions

Relying on the employer Superannuation guarantee contribution of 9.5% will most likely not provide you with enough Superannuation in retirement. It is worth considering options like pre-tax salary sacrifices or personal contributions from your take-home pay to help grow your super ‘nest egg’.

5. You have other options than...

If you would like more control over how your money is invested, you might prefer a fund that offers more investment choice. If you would like more diversification, flexibility or a service that offers some security than speak up, it is important that you ask and compare.

6. Check your investment options

Make sure your super is invested into the right option for you. Most of us leave our super invested in the default investment option. However, the default choice is unlikely to be the right one. As an example, if you are younger and have plenty of time on your hands before retirement, you might prefer a high growth option that is likely to deliver better returns over the long term. Whereas, if you are nearing retirement you are likely to prefer a more conservative option that focuses on keeping your retirements savings safer.

7. Get professional advice

Managing your finances can be hard work even if you have some financial knowledge. We can help you identify different investment strategies, the level of risk involved and the potential returns you can expect.

 

How can we help you?

Contact us today to organise an initial appointment with a Superannuation Specialist. The specialist can provide a free financial assessment to see how long your superannuation will last when you retire, the options you have available and look at the impact on your individual circumstances.

We provide a holistic service and can assist you in all areas of your financial life. Please click here for a full list of our services.

 

 

© 2017, John Hehir, Financial Advisers Australia

© 2017, John Hehir, Financial Advisers Australia
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