No time for super?
Are you too busy (or let’s be honest, do you lack the inclination) to give much thought to your super, yet have a nagging feeling you should?
In this article, we’ve stripped the often-confusing world of super right back to its basic elements, to show that it’s not so hard to start getting ahead of the game with your savings.
‘What is super and why should I worry about it?’
All you are doing with super is growing a pot of money you can live off when you stop working. It grows in three ways:
- If you’re employed, your employer must contribute 9 per cent of your salary into a super fund.*
- Your money doesn’t sit idle. It’s invested. Your account balance may fluctuate, but over time it should grow.
- You can add more money to it yourself.
‘Why would I want to add more to my super?’
Because relying on the minimum contributions from your salary, and your investment returns, might not be enough on their own. But you can get ahead by putting in more than just the 9 per cent.† Or if you’re self-employed, you may get a tax deduction on personal super contributions.
Three easy ways to boost your super
- Salary sacrifice. It sounds painful but it’s probably the easiest way to grow your super. You just ask your employer to divert some of your pre-tax salary into your super account every time you get paid.
- Making one-off contributions from your take-home pay. You can even do this via BPAY– so it couldn’t be easier.
- Combine multiple super accounts into one
If you’ve got several super accounts, you’re probably paying more in fees than you need to. Over time, this can really add up – as well as all the extra paperwork. Combining your super is probably much simpler than you think.^
‘Am I in the right investment option?’
Good question. Switching investment options is easy. But being in the wrong one – for example, one that is too conservatively invested for your age – could end up costing you many tens of thousands of dollars. Ask your fund, or check your annual super statement, to find out where your money is invested.
You can find out which investments might suit you best by trying an online investment risk profiler, such as the one at suncorp.com.au/super
‘When can I get my hands on my super money?’
Access to your super is generally restricted until you reach retirement age and retire (or meet what’s called a ‘condition of release’). Your retirement age will be between 55 and 60, depending on your date of birth. Anyone born after 1 July 1964 will have a retirement age of 60.
*Rising to 12 per cent by 2019
†There are limits (sometimes called ‘contribution caps’) on the amounts you can contribute to super in any one financial year.^Before combining your super you should check with your other funds to see if you’ll pay any exit fees and if your insurance cover or tax situation is affected.