When it comes to Superannuation, people grasp the concept that it is a savings plan for their retirement, but is something that they do not want to spend much time learning or understanding about.
The money comes from contributions made into your super fund by your employer and can be added to with your own money over the years. The government can also add to it through co-contributions and the low income super contribution.
The government also provides tax concessions which make it the most effective way to save for retirement. There are different forms of superannuation today, with Australians investing their funds into Industry and Retail funds, Wrap’s and Self-managed super funds.
If you are employed, your employer must pay 9.25% of your salary into a super fund. Over the course of your working life, these contributions add up, and are invested by your super fund so it grows over time. This ensures you have money to live off when you retire.
You can also choose how you'd like your money invested. You can also transfer your money to a different investment option within the fund, or transfer to another super fund at any time.
When you reach 55 to 60, depending on what your reservation age is and you are retired, you can withdraw your super. There are three options for this:
- As a retirement income similar to a wage or salary
- A lump sum. A percentage of your fund. It can't all be withdrawn in the first year
- A combination of both
If you choose to take your super as a retirement income, the money that you're not spending continues to work for you and earn interest.
We help our clients structure a plan to achieve their lifestyle goals without changing their day to day living.