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Super basics: your guide to a secure future
Superannuation (or super for short) is like a piggy bank your employer contributes to, helping you build a nest egg for a comfortable retirement. Let's crack open the piggy bank and understand how it all works.
What is super?
Think of super as your long-term savings plan for retirement. The money you and your employer contribute gets invested by your chosen super fund, aiming to grow over time. When you retire, this accumulated amount will help you enjoy your golden years.
Super payments: how are they paid?
By law, your employer must contribute a percentage of your salary (currently 11%, rising to 12% by 1 July 2025) towards your super. This is called the Super Guarantee. You can also make voluntary contributions on top of that, boosting your super savings.
Choosing your super champion: picking a super fund
There are hundreds of super funds, each with its own fees and investment options. So, how do you pick the right one? Here are some tips:
- Compare fees: Look for a fund with low fees, as these can eat into your savings over time.
- Investment options: Consider your risk appetite. Do you prefer a more cautious approach or are you comfortable with higher risks for potentially higher returns? Choose a fund that aligns with your goals and gives you flexibility to change your investment options over time.
- Past performance: Check the fund's past performance, but remember, this doesn't guarantee future results.
Super status check: viewing your super balance
Ever wondered how much super you have stashed away? You can easily check your super balance online through your super fund's website or app. Some banks even allow you to view your super alongside your regular bank accounts.
When can you access your super?
There are specific rules around accessing your super. Generally, you can't withdraw it until you reach your preservation age (which depends on your birth year). There are some exceptions though, such as if you become permanently incapacitated or experience severe financial hardship.
Super knowledge is a superpower!
Here are some additional super tips to keep in mind:
- Consolidate your super: If you have multiple super accounts, consider consolidating them into one. This makes it easier to track your savings and potentially reduces fees.
- Salary sacrifice: You can contribute some of your pre-tax salary to super, which can lower your taxable income and boost your super savings.
- Free super advice: The Australian Government provides free financial advice services to help you navigate the super landscape.
Understanding super might seem daunting at first, but with a little knowledge, you can take charge of your future. Remember, it's your money and by making informed choices, you can ensure a super comfortable retirement!