Are you feeling overwhelmed with anything that has to do with your superannuation? As the 30 June approaches now is the time to learn more about your superannuation and feel comfortable when discussing it. Here are some answers to common questions that may help you gain a bit more clarity:-
1. Should my employer be making super contributions on my behalf?
In simple terms, yes! Most employees earning more than $450 per month should be receiving superannuation contributions from their employer into their super fund. Contributions (9.5% of salary) must be made by the employer at least quarterly into a fund of your choice. If you don’t nominate a fund; your super will be paid into a default fund usually chosen by your employer. You may also be eligible for the $500 Government contribution if you’re a low income earner ($37,000 or below).
2. How can I find out if my employer is making contributions on my behalf?
The best way to find out if your employer is making contributions to your fund is to phone your fund and ask them or to speak to the financial department of your work place. If you have not received contributions on at least a quarterly basis, you will need to discuss this with your employer or contact the Australian Taxation Office (ATO).
3. Should I be contributing additional amounts to my super?
This is entirely up to you and your individual circumstances; you should consider making additional contributions to increase your savings for your retirement. Small, regular additional contributions to your super can make a huge difference to your savings over the long term.
4. How can I make additional super contributions?
Additional contributions to your super can often be made tax effective by your employer through salary sacrifice arrangements. Salary sacrificing is giving up some of your pay and putting it into your super instead. You will save tax and boost your super. Your employer can also make additional after-tax super contributions as directed by you. If you choose to salary sacrifice this is something that you will need to discuss and arrange with your employer. You’re also able to make additional contributions directly by contacting your super fund.
5. Should I keep multiple super accounts?
Having multiple accounts means multiple fees. It is recommended that you consolidate all of your super accounts into one to help reduce the total amount of fees you will pay. For more information on this topic refer to our recent blog.
6. How can I check where all my superannuation is being held?
The ATO offers a free online tool called SuperSeeker to help you track your super, find any lost super accounts and helps you consolidate multiple accounts into one.
7. Should I consider a self-managed super fund (SMSF)?
Self-managed super funds can be great retirement saving idea, particular for active investors looking for greater control and flexibility with their super. The difference between a SMSF and other types of funds is that the members of an SMSF are usually also the trustees. This means the members of the SMSF run it for their own benefit. However, managing your own super comes with responsibility and knowing and understanding the rules are the most important thing. If you are considering a self-managed super fund please contact us to discuss your options.
8. Are there any tools that can help me work out how much money I will need/have in retirement?
We can definitely assist in working out how much money you will need/have for retirement. However, if you would like some basic information the Money Smart website is a great website to start with.
9. Should I worry about my superannuation?
Yes! superannuation is the most effective way to increase your income throughout your retirement years. Although you may be eligible for the government’s aged pension, it is widely accepted that the level of income provided may not be adequate for a comfortable retirement.
10. How do I claim my super when I retire?
When you retire and have reached preservation age you can withdraw your super. There are three ways you can get your super; in a lump sum, as a retirement income stream (e.g. monthly payment) or a combination of both. If you choose to take your super as a retirement income stream, the money that you’re not accessing continues to work for you and earns interest.
Superannuation can be very confusing and you should know where your contributions are going. If you are in need of any advice or are considering a self-managed super fund contact Grange Business Partners today – we are happy to help!