Your superannuation will be one of the most important investments of your life. And as a long-term investment, the decisions you make today can have a huge impact on the amount you end up retiring with.
Superannuation is a lifetime investment designed to financially support you in your retirement. The money comes from compulsory contributions made into your super fund by you if you are self-employed, or your employer if you are an employee. It can also come from additional contributions made by you.
Your employer is required by law to contribute a minimum of 9.5% of your wage. This is paid on top of your wage and is often included as part of your remuneration package. Throughout your working life, these super contributions accumulate and are invested, which accelerates the growth of your fund. The Government wants you to be able to support yourself in retirement, and therefore, there are tax, insurance and investments advantages that help build your superannuation.
Putting more money into your super earlier is much better than only putting in a lot towards the end. Make earlier contributions because the longer your money is in the account, the more you will earn as it grows over your working life.
Having more than one super fund means multiple sets of fees, more time and effort required for management and maybe even losing track of some of your super. Consolidating all your super into one account means you can concentrate your efforts and pay only one set of fees. With less fees eating your funds, you can earn more and see potentially higher investment returns.
If you are a low to middle income earner, you may be able to take advantage of the super co- contribution payment from the Government. This means that the Government will match – or more than match – your eligible, personal, super contributions, up to a certain limit. If you are eligible, there is no need to apply; just make personal super contributions, then lodge an income tax return and you will receive this benefit.
Each super fund differs in terms of investment options, performance history, admin and management fees, insurance benefits and more. Contact us today and we can refer you to a Financial Planner.