Superannuation has appeared in the news quite a bit over the last couple of weeks!
Apart from the removal of minimum income level for super, it has also been announced that the Superannuation Guarantee would increase from 10% to 10.5%. Both amendments to Super will kick in on the 1st of July 2022. Then the Super Guarantee will continue to rise 0.5% every year until it reaches 12% in 2025.
What does this mean you may ask?
Quite simply – it means you end up with more money for retirement.
Think of it as a forced saving for your future enjoyment.
What is Superannuation?
Superannuation (or Super) is a compulsory payment made by your employer that is put into a fund to ‘save it for later’ – when you retire.
From the day that you started work & started earning money, every time you have been paid, your boss has put a percentage of your pay (before tax) into your super fund. This money is yours, but you’re not allowed to touch it until you retire and the more money you have, the more comfortable your retirement will be. (The difference between the basic or deluxe caravan for that trip around Aus!) 😊
Who controls the Superannuation Guarantee Rate?
Economists warned that if the Super Guarantee rate didn’t increase, Australians wouldn’t have enough money to meet the basic needs for a comfortable retirement. Who were they warning? The Australian Government. And they listened – so Federal Parliament passed legislation for the rate to gradually increase 2.5% over 5 years.
Will 2.5% make a much of a difference?
It may not seem like much now, but over time (and with a bit of help from compounding) it will likely add tens, and in some case hundreds of thousands of dollars to your super balance at retirement.
It was Einstein who said “compound interest is the eighth wonder of the world”!
Check you’re getting the right amount of super
Superannuation is sometimes overlooked or ignored by many of us because it’s one of those ‘out of sight, out of minds’ part of adulting.
But at a certain age your super will be one of the most important things and you’ll wish you’d paid more attention.
If you think your superannuation is being paid incorrectly, the first step is talking to your employer. Ask how often they are paying your super and which fund they are paying it and how much.
There are a few things you can do to make sure your Super is being paid correctly:
1. Check your Payslips
The Fairwork Ombudsmen states that super is required to appear on your payslip. Make sure that the super amount equals 10.5% of your pay.
Example: If you get paid $500 a week (before tax has been taken out) your employer should be paying $52.50 into your super fund from July 1, 2022.
2. Check your Super Fund
The best way to check your super, is through the website of your Super Fund provider. This will give you an up-to-date balance. Alternatively, you can check the balance of your superfund through the ATO but the balance shown is only updated once a year. This means the further away you are from the update date, the less accurate the shown balance will be. If you prefer to talk to someone over the phone, you can also call your superfund and ask for your last Member statement. If you are still unsure if it is being paid correctly, you can phone the ATO on 13 10 20 to ask more information.
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Making sure your Superannuation Fund is in order is just as important as your Tax Return, Will & Health Insurance. Let One Click Life take care of these essential tasks, so you not only have peace of mind for the future, but more time to do the things you love.
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