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Nine things you should know about Super

Your retirement might feel like a far off dream, but without the correct amount of Super it may stay that way. To make sure you enjoy a comfortable retirement, it’s important that you spend some time learning about superannuation.  Here are the Top nine things you should know about Super:

1. Superannuation guarantee – Your employer has to contribute money to your member account in a super fund on your behalf. This is called SG contributions and is currently 9.5% of your wage.

2. Tax on concessional (before tax) contributions – Your employer’s compulsory SG contributions and any before-tax contributions that you voluntarily choose to make are taxed at a maximum rate of 15 per cent when the super contributions enter the super fund.

3. Special tax rate on investment earnings – Earnings on your super fund’s investments are also taxed at no more than 15 per cent.

4. Co-contribution – If you make any contributions, after tax to your super fund, and the government may put some tax-free money into your super fund for you (depending on your income levels). This is known as the co-contribution.

5. Fund choice – In most cases you can choose the super fund you want your employer’s SG contributions paid into. If you don’t choose your super fund, your employer chooses for you. or, in certain instances, your super fund may be determined by an employment agreement or industrial award.

6. Investment choice – Most super funds allow you to choose how you would like your money invested through your super fund’s investment options. If you don’t make an investment choice, then your super money is invested in a default investment option.

7. Member reporting – Your super fund must send you regular reports (at least annually) on the fund’s performance, and on your own account’s performance. Your super fund must also state fees charged, and show you any other transactions on your super account.

8. Preservation – Your money is preserved in super. That means you generally can’t take your money out of the super fund until you retire at or after your preservation age.

9. Tax-free for over-60s – At the age of 60, you pay no tax on payments from your superannuation benefits. When you receive a pension from your super fund, earnings on the assets that finance your pension are exempt from tax.

The earlier you start saving for your retirement, the more you will have to spend once you’re ready to finish working. Remember your superannuation is your money. So take an active interest in your super, plan ahead and staying in control of your finances, and you will be able to enjoy a safe and comfortable retirement.

*Disclaimer- Principal Wealth Management Pty Ltd are corporate authorised representatives of Charter Financial Planning Limited, ABN 35 002 976 294, AFS License No. 234665 Member of the AMP Group. This document provides general information only. Before making any financial or investment decisions, we recommend you consult a financial planner to take into account your particular investment objectives, financial situation and individual needs. Chater Financial Planning and its Authorised Representatives do not accept any liability for any errors or omissions of information supplied in this document.

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Shane Lee

About the author

Shane is a Certified Financial Planner® with 25 years experience in banking and finance backed by a Bachelor Commerce and a Diploma of Financial Planning. Shane joined BMO in 2002 where he helped established the financial planning and become a Director of BMO Financial Solutions. He provides a range of services including wealth creation strategies, investment planning, budgeting, life READ MORE

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