A tax-effective way of saving for your retirement
An introduction to super
A super fund is a long-term investment designed to help you to save money during your working life to support your lifestyle in retirement.
Contributions made to your super accumulate during your working life and are invested in a range of investment assets, such as cash, fixed interest, shares, property and alternative investments.
Profits from these investments, both income and capital growth, are reinvested to increase the value of your super.
Once you have met a 'condition of release', generally when you reach your ‘preservation’ age and have permanently retired from the workforce, you will be able to:
- withdraw your accumulated superannuation as a lump sum, or
- roll your superannuation across to a pension account and commence receiving regular income payments.
Accessing your super benefits
All contributions paid into a super fund are preserved until you have met a condition of release such as reaching your preservation age and being retired from the workforce.
In other limited circumstances you may be able to access your super benefit, for example under financial hardship, or if you become totally and permanently disabled.
|When were you born?||Your preservation age|
|Before 1 July 1960||55|
|1 July 1960 – 30 June 1961||56|
|1 July 1961 – 30 June 1962||57|
|1 July 1962 – 30 June 1963||58|
|1 July 1963 – 30 June 1964||59|
|1 July 1964 – or later||60|
Why is super important?
Your super will most likely be the second largest asset you will have in your life, after the family home. If you don’t take care of it during your working life, you may find that you don’t have enough money when you reach retirement.
And if you’re thinking of relying on the Government to support you, you may want to think again. According to the ASFA Retirement Standard, the current Government Age Pension doesn’t provide enough income to fund a comfortable retirement, as shown in the table below.
|Estimate of how much you will need per fortnight for retirement (from ASFA’s Retirement Standard)|
|The current Government Age Pension|
|Standard (not including the Pension Supplement)||$850||$1,282|