Superannuation is a way to save for your retirement. The money comes from contributions made into your superannuation fund by your employer and, ideally, topped up by your own money.
Superannuation offers the one real area where tax savings can be achieved. If you structure your superannuation activities correctly, then you reduce the tax that you might otherwise pay on investment income. These savings are legally available to normal taxpayers.
Currently, Australian employers are required to contribute 9.5% of your salary into a super fund. This is called the Superannuation Guarantee and it’s the law. Even though compulsory super is intended to help fund your retirement, it may not provide you with enough money in retirement for the lifestyle that you want.
Generally, you can only access your super savings when you reach preservation age. This is to ensure your super savings are used for when you reach retirement.
Before you can access your super you need to meet one of the conditions below:
- Reach preservation age and retire
- Reach preservation age and continue to work
- Changing jobs on or after 60 years of age
- Reach 65 years of age.
Your ‘preservation age’ determines when you can access your money, even if you have not retired. It is based on your date of birth and ranges between 55 and 60.
Therefore it is important to make your superannuation work for you.
There are some superannuation changes coming in July 2017, so before you decide on whether you can solely rely on compulsory super contributions, talk to us today.
This information is of a general nature only and has been provided without taking account of your objectives, financial situation or needs. Because of this, you should consider whether the information is appropriate in light of your particular objectives, financial situation and needs.