How well do you know your Super?
All About Superannuation
Superannuation is a compulsory arrangement put in place by the Australian Government to encourage people to accumulate funds to provide them with an income stream when they retire.
Your employer pays a minimum of 9.5% of your salary into a super fund nominated by you. The employer contribution rate Superannuation Guarantee Contribution (SGC) has been 9.5% since July 2014, with a plan to increase it to 12% by 2025.
While you may feel compelled to save Super, you can choose Australian Islamic Super as your superfund.
Super is also a tax-effective way to save for your retirement. You only pay 15% contributions tax on your before-tax super contributions.
What happens when I retire or reach my preservation age?
You can access your super, once you retire or reach your preservation age.
- When you reach preservation age and retire
- When you turn 65 (even if you still working)
- Under the transition to retirement rules. while continuing to work
Before reaching the preservation age, still you can access your Super under a very limited circumstances, like severe financial hardship or specific medical conditions.
Access your Super Early
What are some of the strategies and tips to increase my Super?
1. Consolidate your super
Consolidating your accounts into one could save thousands of dollars over time and be a strong boost to your retirement savings in the future.
2. Find and claim your lost superannuation.
Our Islamic Choice Super team can help you to check with ATO if you have any lost super sitting there waiting for you to claim it. If your lost super has been transferred to the ATO you can still retrieve it. This needs to be done ASAP to make sure you don’t miss out on any investment returns.
3. Choose the right investment strategy.
Choose your investment strategy based on your risk tolerance. As you move into a different stage in your life, different investment options might be appropriate for your situation and worth considering.
4. Boost your balance with additional contributions:
You can contribute more money into your super account through concessional or non-concessional contributions. Note: Limits apply to how much you can contribute to super in any one financial year.
5. Consider switching funds:
Every superannuation fund has different fees structure and investment strategies, so make sure you choose the right Investment strategy by doing a little bit of research that covers:
- Investment strategy with the lowest possible fees that still provide good performance.
- Investment options that suit your risk tolerance.
- Strong investment rationale including an understanding of your life stages and financial objectives.
How much will you need?
Work out how much super you’ll have when you retire, and if it will be enough to fund the lifestyle you want.
You probably know how much super you have now, but do you know how much you’ll have when you retire? It’s never too soon to start planning for a better financial future.
The amount of super you’ll need when you retire depends on:
- your big costs in retirement,
- the lifestyle you want
Most people can now expect to live well into their eighties. This means that if you stop working at 65, you’ll need retirement income for 20 years or more.
ASFA Retirement Standard
$44,183 a year | $849 a week
$62,435 a year | $1200 a week
$28,220 a year | $542 a week
$40,719 a year | $783 a week
ASFA estimates that the lump sum needed at retirement to support a comfortable lifestyle is $640,000 for a couple and $545,000 for a single person. This assumes a partial Age Pension.
ASEA estimates that a modest lifestyle. which covers the basics. is mostly met by the Age Pension. They estimate the lump sum needed to support a modest lifestyle for a single or couple is $70,000.
Build up your super
Many things contribute to your income in retirement. This includes investments outside of super and assets such as your home, especially if you downsize. If you decide it is important to build your super, there are some actions that can make a big difference over time.
- Consolidating your super into one account so you pay fewer fees
- Making extra contributions to grow your super
- Changing your super investment options
If you don’t have as much as you’d like, it’s never too late to build up your super to boost your retirement savings.
If you need financial advice
Planning for your retirement is complex, and everyone’s situation is different. Think about getting personalised advice from one of our financial advisers to help you plan ahead.
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