What is Superannuation? Here are the six things you need to know.
Superannuation (or super for short) is extra money that has to be paid to you by your employer. Most Australians with a job have a super account.
In most cases, you have the right to choose which super fund you use. Every time you start a new job, you give those super account details to your employer. If you don't give your details, they have the right to start an account on your behalf with their default super fund.
The idea behind super is to make sure that everybody has some money to live off when they retire. So, under normal circumstances, you aren't allowed to withdraw your super until you have reached your preservation age and permanently retired from the workforce.
Money in your super account is professionally invested in all types of assets, including shares. So, in the short term, your balances can go up and down. Also, the money you make in your super account is eligible for special tax treatment, which makes it an attractive way to invest.
So when do you get super?
If you're over eighteen its simple.
Your boss has to pay you super if you earn over $450 in a month. If you're under eighteen, your boss has to pay you super if you earn over $450 in a month and you've worked over thirty hours in a week.
So how much do you actually get?
It's 9.5% on top of your wages, so if you earn $800 in a month you get an extra $76 in super.
So why is it important?
Its real money and it's yours so you should look after it. Its crazy but a lot of Australians don't. Right now the government is holding almost $18 billion in lost super accounts. The big takeaway is to get your super organised.
Small choices now, can make a massive difference to your future.