If you are just starting out on your career path, you probably aren’t that familiar with superannuation, or super, as we Aussies call it, so it’s important to understand the superannuation meaning in Australia.
Simply put, super is money that goes into a special fund to help you enjoy a secure retirement.
Super is your right as a working age Australian and your employer must pay money into a super account in your name.
Employers are legally bound to pay 11.5% of your gross income.
As an employee, you must work at least 30 hours per week to qualify for SG, Superannuation Guarantee.
1. You can make further Super Payments
You can make additional contributions to your super account, which helps ensure a stable and secure retirement.
Regularly contributing to your super is one key step toward financial freedom, as it builds a financial cushion over time, providing long-term security.
For self-employed individuals, super contributions are entirely voluntary.
However, no one should go through their self-employment career without putting something aside.
2. Two Phases of Superannuation
There are two phases of superannuation, which are as follows.
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Accumulation Phase
This is the stage where your super is accumulating.
You keep your money and any return on the investment until you reach the age of 60.
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Retirement Phase
When you start a super income stream, you transfer funds from the accumulation phase.
Most working adults consult with a financial adviser regarding their super and the earlier you do that, the better.
3. Superannuation and Expected Progress
You might be curious as to, how much super should I have?
If you search online, you can find a table that shows a range of age groups alongside the amount of money that should be in your super account at that age.
It is wise to compare your super to others of your age to get a good idea of how you are doing with regard to accumulating funds for your retirement.
Don’t make the mistake of thinking that your pension will magically sort itself out.
You need to give it your attention as early as possible.
4. Regular Assessments
Starting in your thirties, it’s essential to regularly assess your super to ensure your savings align with your retirement goals.
This proactive approach is part of how to get ahead financially, as it allows you to make necessary adjustments and optimize your savings for long-term growth.
You can always add extra contributions to your super.
It is a powerful strategy to boost your financial position and ensure a secure future.
If you’re unsure about the best course of action, seek advice from a leading Australian financial consultant.
This can help you create a plan tailored to your needs for a stable retirement.
For self-employed individuals, it’s particularly important to take these steps, as super payments are not compulsory.
Developing a solid plan is crucial to ensure you have adequate funds for a comfortable retirement, allowing you to get ahead financially even without the structure of employer contributions.
Final Words
To summarise, every single working Australian should be accumulating super in their account.
This money is invested and you do pay tax on returns.
Check online and find special calculators to help you work out how much you should be putting away for your retirement.
