September 21, 2017

What is Superannuation in Australia

Superannuation is a way to accumulate funds through your working life for your retirement.

It is compulsory for employers to contribute to superannuation on behalf of their employees.

Your employer must pay 9.5% of your salary into a superfund. This is called the Super Guarantee. You can also top it up with your own money.

If your money is being paid to a super fund, it is invested by your super fund manager into assets such as shares, property and term deposits so it can grow.

To encourage people to invest in super, the government taxes it at a much lower rate than investments outside super.

Generally, you are not allowed to withdraw money from your super until you reach your preservation age, which currently ranges between 55 and 60, depending on when you were born.

At retirement, you can retire and start withdrawing your super to live off.

The earlier you start putting money into super, the longer it has to grow. Retirement calculator will help you on this purpose

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