Superannuation Australia is something almost every working Aussie will encounter at some point. It is pretty essential for them, but it can also be easy to get confused by all the technical talk and jargons. It might be difficult for a working individual to understand the system fully.
What is superannuation?
Personal superannuation is the way of putting aside and saving money while you are working. In this way, you will be able to enjoy a regular income later in life when you plan to retire. An average Australian is expected to retire within 20 years.
Investing money in a superannuation fund is like building a nest to live in in the future. If you put more money into this fund, you will be able to spend more in your retirement. It is a useful alternative if you are no longer earning a wage.
How does it work?
If you are working for an organisation or company, your employer will be paying money into your super account that is managed by the super fund. This is called a super guarantee by the law and the formula used is currently 9.5% of your income, including commissions, bonuses, and loadings. You can also put extra money into your account for you to have more to live off when you decide to retire.
If you are self-employed, you can decide how much money you will set aside for superannuation. Your contributions will add up throughout your working life. These are invested by your super fund to help them grow even more. The government will place restrictions on how and when you can access your fund to ensure your superannuation savings are there for your retirement.
When can you access your super?
Generally, you will need to wait until you retire. For your super to be tax-free, you need to be at least 60. Also, to make your retirement more comfortable, you need to have a regular super income stream. Once you have retired, you can now take out a lump sum and combine a steady income stream with the Government pension.
Superannuation Australia offers a lot of benefits for working Australian or super fund members. Depending on your employment status and the type of fund you belong to, you may be receiving more earnings without knowing it.
If you need assistance regarding superannuation, contact New Wave Advice now!