Now that the July 2017 changes are in place, Australians must make super decisions with a new set of rules, especially in relation to super contributions and super pensions. Unfortunately, more complexity usually accompanies any superannuation reforms, driving many Australians to seek out financial advice.Note: For ... Read more
Super for Beginners
What is superannuation?
Your superannuation account exists only because you, your employer or someone else makes regular cash contributions to your super fund. A superannuation fund is an investment vehicle that receives special tax concessions from the federal government. The cash that is held in your superannuation account is then invested in assets to generate returns for your eventual retirement.
Apart from the return on your super investments, and the costs or fees your super fund charges against your super account, a healthy superannuation payout on retirement depends on the amount your employer (or you) contributes to your fund throughout your working life. Your super life starts when you join (or your employer joins on your behalf) a superannuation fund.
When you understand the basics, you can forge a strong financial future for yourself through superannuation. A weekly, monthly or quarterly contribution to a super fund can provide you with multiple investment choices and tax breaks, and insurance protection if you become disabled before you retire. You can considerably boost your final superannuation benefit by making your own contributions to your fund. You may also have the flexibility to structure your contributions in a way to reduce the amount of income tax that you pay.
Superannuation Guarantee (SG) is the official term for compulsory superannuation contributions made by employers on behalf of their employees. A SG contribution represents an employer contribution to a super fund that is equivalent to 9.5% of an employee’s ordinary time earnings. For example, on a $50,000 a year income, that amount works out to be $4,750 a year.
If you’re self-employed, you don’t have an employer making super contributions on your behalf but you do have access to tax deductions when you make your own superannuation contributions.
Superannuation for Beginners articles are a great starting point for anyone beginning their superannuation journey, or beginning their super education.
You can find the answers to questions that you may have been afraid to ask, or not known to ask. You can also ask your own questions, which helps us build the Beginners section of SuperGuide, and helps our many thousands of readers.
Below are some of our key Super for Beginners articles:
Set out below are all SuperGuide articles referring to Super for Beginners.
Problem with your adviser or super fund? A 2-step plan to resolve it!
Knowing who to turn to when you need help resolving a problem with your super fund or financial adviser can be tricky. There are a number of organisations that can help, but they all have different areas of responsibility and can help you in different ways.To help you understand what assistance is ... Read more
Super health check for beginners: 10 tips for your 2017/2018 retirement planning
Note: This article is current for the 2017/2018 financial year.Near the start of each financial year, SuperGuide publishes an updated super checklist for beginner readers. More advanced checklists will follow in coming months. Use this list as a kick-start for your 2017/2018 super resolutions. You may not keep all ... Read more
Boost your spouse’s retirement kitty: 10 things you need to know
These days it’s rare for a government to be more generous about handing out benefits, but when it comes to helping boost your spouse’s super, that infrequent event is set to happen.From 1 July 2017, the maximum income threshold for the spouse contributions tax offset jumps from its current measly upper limit of ... Read more
Financial advice: Only 83 independent financial advisers in Australia
Note: This article is updated regularly when new financial advisers join the independence club (latest update June 2017). A financial adviser does not have to be a member of the IFAAA to join the SuperGuide list, provided they can declare that they satisfy the requirements of being an independent adviser (we now have 3 ... Read more
Super for beginners, part 7: Can I split my super benefits with my spouse?
Q: I am 42 years old and my partner is 57 years old. We have a very big mortgage as we are both the casualties of wealth destroying divorces and single parenthood! We intend to pay off our mortgage before putting more into our superannuation. Can I transfer part of my superannuation to his fund now, as I have much ... Read more
Super for beginners, part 6: Can I make concessional (before-tax) contributions while I’m unemployed?
Q: I have been made redundant and would like to know if any contribution in super is tax deductible while I’m unemployed, even if I would find work in the next couple of weeks?Yes, it’s possible to make concessional contributions while an individual is unemployed. The second part of the answer however, is, if a ... Read more
Super for beginners, part 5: Is super my money, or the Government’s money?
Q: I never understood the term ‘superannuation’. Is that our money or government money? If it is our money why can’t we do whatever we want with it? Isn’t it illegal to cut our rights when it comes to this matter?I agree with you that the term ‘superannuation’ is confusing.If an individual is employed, the ... Read more
Super for beginners, part 12: I claimed my super due to hardship. Why do I have to pay tax?
Q: I’m 30 years old. Last year I claimed $5,000 of my super due to financial hardship – I suffered illness, and was not able to work. I only received $3,800. Will I get the balance back, since I haven’t worked since then?A: Unfortunately, when you access your super benefits before the age of 60, you can expect your ... Read more
Super for Beginners (25 Q&As)
One of SuperGuide’s more popular initiatives has been the development of a ‘Super for Beginners’ section that answers some of the many questions that we receive from those readers who are new to superannuation and new to super’s terminology.The series currently consists of several lead articles, plus 25 Q&As, ... Read more
Super for beginners, part 10: Can I access my super early to reduce my mortgage?
Q: I owe approximately $190,000 to the bank on my 2-bedroom unit, and I would like to know if I can invest my $60,000 of super into the unit to reduce my mortgage repayments to the bank?A: Superannuation is subject to special access rules called preservation. What this means is that you cannot access your super ... Read more
Super for beginners, part 24: Do I have to withdraw my super when I turn 65?
Q: I retired, sold my large house, downgraded, invested spare money and one month after I invested, I lost $50,000 just like that. I would like to know whether I can keep my super going beyond age 65, maybe to age 67 to help recoup my losses on my outside investments?A: I’m very sorry to read about your ... Read more
