Superannuation Made Effortless
Everyone should have superannuation. It is a way of saving money for your retirement and an important part of your retirement planning. Superannuation is what will provide an income for you when you retire, therefore it is necessary to make sure you have enough to live on comfortably for the years you have left – however many that may be. Superannuation gives you a means of remaining independent from government help for your basic daily needs when you can no longer work.
If you ever wanted to pay lots less tax than you are at present – as most people do – then superannuation is the way to do it. In fact, you save on tax in two ways with superannuation. Firstly, the money you put into your super fund attracts tax deductions and secondly the income or earnings that you make from your super fund is taxed at the much lower rate. Then after you retire, the income from your super fund is again taxed at a concessional rate.
While your employer will be making payments into your superannuation fund, the 9% of your salary that he is required to make will not be likely to provide you with a comfortable retirement on its own. But if you add to it yourself, your savings will become significantly higher in the long run.
Those whose income is in the moderate to low bracket are quite likely to be eligible for a co-contribution offered by the federal government. This means that when you scrape up enough to put in, the government will match it or more. High-income earners may have to make more of a sacrifice with additions from their own pockets to be sure their superannuation fund is enough to support them. Self-employed people are entitled to claim a deduction for superannuation. Age will dictate the amount allowed.
Access rules vary depending on when you were born. A spouse who has never worked must wait until the age of 65 before access is possible. Those born after 30th June 1964 have to be 60 years old before they can access their superannuation. 55 is the preservation age for those born before then. Of course you must actually be retired, too.
Basically there are four different types of super funds. Corporate funds which are open only to the people working for the corporation; industry funds open to those working in a particular industry; retail funds open to the general public and self-managed funds that are only open to three other people besides yourself. Trustees run these funds and in the case of a self-managed fund, you must become the trustee.
About author
Harrison Paspalis is an experienced financial advisor who is writing article on superannuation fund and other financial matters. According to him, australian superannuation is a plan and program which should be worth noticing.
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