Securing Your Retirement: A Guide to Superannuation

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Retirement may seem a long time from now for you. But it’s never too early to start thinking about it. Ideally, you’ll be working towards retirement earnings as soon as possible. The fact is that the sooner you start saving, the more you save. And the more you save, the sooner you can stop working.

So how do we go about starting to save? It can depend on your current career. Many businesses work with you in your retirement fund goal in a process called superannuation.

What is superannuation?

Superannuation is a method of saving for your retirement. The bulk of the money will come from your employer. They will make contributions of around 9.5% of your salary into what is a called a ‘super fund’. You can also contribute money to your super fund. The money in your super fund accumulates interest over time, so any way you can increase the amount in there will pay off in the long run! Super funds are taxed less than similar long-term investments; something else that will boost the amount you end up with.

I’m approaching retirement. What if I feel like I need more money?

If you feel that you’re going to need more money than your super fund is forecasting, then there are three common paths people go down. They don’t sound luxurious, though! The first consideration to make is retiring later, if possible. If you retire later than you originally planned, then you’ll accumulate more primary funds and interest. Over time, the interest rate increases, so the overall value increases quicker. The other two options are simple ones to consider while in retirement. You could consider getting an undemanding part-time job. You could also consider living more modestly. Just because you’re hitting retirement, doesn’t mean to you have to fly away on an expensive vacation abroad!

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Can I have more control of my super fund?

One of the problems people have with super funds is that it’s largely controlled or managed by either your employer or the government. This can work in your favour; it means you’re not personally liable for every decision. This sometimes scares people away, but there are self managed super fund services which can make the whole thing less daunting. By taking control of the funds yourself, everything becomes transparent to you. This is a massive bonus for people who don’t want the whole thing to be a mystery until retirement day.

Remember to keep track of your super fund

Tying into the self-managed route, it’s important that you keep a close eye on this long-term investment. As you change addresses and jobs (or even your name), then there’s a chance you can lose track of your super. One of the negatives of losing track of your super is that you may have more than one ongoing. This happens if you’ve been at more than one job and the financial info wasn’t transferred correctly. If you are paying a fee for your super fund then you could be getting charged more than you expected. Finding these supers means you can consolidate them, merging them into one super.