Australian Superannuation
Knowing how to get the most out of your
super will help you
save for your retirement and reduce stress. Retirement plans may be set
up by employers, insurance companies, the government or other
institutions such as employer associations or trade unions.
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. Sometimes the government will add to it
through co-contributions too.
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Australian Superannuation
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Your employer must currently pay 9% of your
salary
into a super fund. This is called the Super Guarantee and it's the law.
Over
the course of your working life, these contributions from your employer
add up, or 'accumulate'. Your super money is also invested by your
super fund so it grows over time. When you retire, you will have money
to live off – a nest egg.
Super is a lifetime investment that has many
benefits.
Most
people can choose which super fund they'd like their super
contributions paid into. If you want to choose your super fund, tell
your employer by filling in a Standard choice form from the Australian
Taxation Office (ATO) or from your employer.
In some cases your
employer will decide which fund your super is paid into. If you don't
(or can't) choose your super fund, your employer will put the money
into a 'default' super fund, a fund nominated under an industrial award
or by your employer.
An example of the size of superannuation in
Australia, and one of Australia's largest funds, AustralianSuper,
currently has more than 1.5 million members, over
120,000 participating employers and over $32 billion in funds under
management. Like many it is a broad-based,
run-only-to-profit-members industry fund, catering for employees and
employers from any industry or profession in Australia.
They
offer high value services to employees and employers and utilise their
size and financial strength to negotiate reduced fees for investment,
insurance and other services.
If you retire and have reached your
preservation age, you can withdraw your super. There
are three ways you can get your super:
- As a lump sum
- As a retirement income stream (e.g. a
monthly payment)
- A combination of both
If
you choose to take your super as a retirement income stream, the money
that you're not accessing continues to work for you and earn interest.
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