Let's be honest, superannuation is a complex topic to get excited about. However, it's crucial to your financial well-being, but many people struggle to understand it. Understanding superannuation and the various options available can help you reclaim control over your retirement savings.
Super is intended to supplement your income once you retire, and it may be a tax-efficient way to save for retirement in the long run. Your superannuation account may also become one of your most valuable assets over time. We don't think about it very often, but there's a compelling reason to do so.
Here are five important financial facts worth knowing about your super:
1. What Happens to Your Money?
When money is deposited into your super account, the trustee of your super fund invests it on your behalf.
Your money goes into investments like stocks, bonds, real estate, and cash in your superannuation account. Australian superannuation funds are required to release information about how your money is invested.
2. Who Is Responsible for Paying Your Super?
Your employer will usually handle the payment of your superannuation funds until you retire. Your superannuation contributions are tax-deductible, so your employer can pay them on your behalf, and you get a tax write-off.
Even though you're spending time on it now, you'll eventually forget about your super. This is where an SMSF (Self-Managed Super Fund) comes in. The SMSF gives you the power to take control of your super and make the most of your superannuation.
3. What to Do If Something's Off with My Super?
Your employer is the first person you check if you notice something wrong with it. They are obliged to investigate any issues you might have. If they can't resolve the issue, contact the Australian Tax Office (ATO), which will investigate your concern.
If you're considering switching your superannuation fund, you need to do this within a specific timeframe. In Australia, a super fund is required to pay out your superannuation in retirement if you're an Australian citizen or permanent resident.
If you're not one of these, you need to tell your super fund that you want to transfer to a fund in your country of citizenship. You are also required to notify your super fund if you plan to switch to a SMSF, which is different and more tax-efficient than super funds.
4. How to Check Your Balance?
Your employer should provide you with details about how to check your superannuation balance. If you're not happy with your super balance, try to work with your employer to figure out what you can change while you still can.
If you're in control of your super, you can log in to your superannuation account to check your balance and transactions sometime before you retire.
5. Who Can Access Your Super?
You can access your superannuation once you reach your preservation age, generally between 55 and 60. You can stop contributing to your super and start accessing it if you're not working when you get your preservation age.
Diving in all the essential details about your super will give you peace of mind. Understanding your superannuation will help you make critical financial decisions for your future.
Our team at Wealthy You want to assist you with your superannuation needs. We are a Sydney-based Australian mortgage broker that offers the best service and advice to our clients in order to help them achieve their financial goals. Get in touch with us today to learn more about your options and get started!