AustralianSuper - Pre-mixed Balanced Super Fund Offer
- 2019 Finder Awards Winner: Best Super Fund - Balanced
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- Australia's best performing growth fund over 10 years*
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*Past performance data is for the period ending December 2018.
Who pays superannuation in Australia?
All Australian employers are required to pay the super guarantee to their employees. Employers need to pay super into their employee's nominated fund at least four times a year. Australians who are self-employed generally are not required by law to pay themselves super, but it’s definitely a wise idea to do so.
There are a few situations where employees are not legally required to pay superannuation, including:
- If the employee earns less than $450 a month
- If the employee is under 18 and works less than 30 hours per week
- If the employee is not an Australian resident and completes the work outside of Australia
Superannuation has a number of benefits
As well as helping fund your lifestyle when you're no longer working, superannuation has a number of additional benefits.
- You can access cheaper insurance such as life, disability and income protection cover through your super
- Superannuation is taxed at a lower rate (15%) during the accumulation phase
- You can choose how you'd like your super to be invested based on your personal values and appetite to risk
- You can contribute more money to your super to take advantage of the special tax benefits
- when you retire, you can elect to receive your super in one lump sum payment or in stages
To sum up, superannuation works in the following way:
- Your employer makes compulsory contributions on your behalf (currently 9.5% of your gross salary) into a super fund that you or your employer nominate.
- You have the option of making your own contributions as well, and the government may also contribute if you are a low or middle-income earner.
- Your superannuation fund invests the money on your behalf and it grows steadily over many years, accelerating in the last few years when the sum is greater.
- You retire from working life and access your super, either in the form of a lump sum payment or as a regular income stream.
Superannuation is very important
Having inadequate funding for your retirement will not only affect your ability to do the things that you always dreamed of doing when you retire, such as travelling, but it can also affect your ability to do basic and necessary things such as paying the bills, buying food and paying day to day living costs. Whilst saving towards your retirement may not seem like an important issue when you are in your twenties or thirties, time quickly passes and many people who think this way suddenly find themselves approaching retirement age with no funding plans in place. This could leave you facing several very bleak decades, with loads of time on your hands but no money to enjoy it.
By ensuring that you focus on saving towards your retirement from a younger age, you can rest easy in the knowledge that the time you have available after retiring from work can be spent relaxing, enjoying life and achieving your goals.
Need some tips to help you choose a super fund? Check out our guide on how to choose a super fund here.
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