10 SUPER simple Q&A’s about your SUPER!

Superannuation should be what it is in the name - SUPER! We’re sure you see super (especially if you’re in your 20’s) as another unattractive ‘expense’ you’re forced to pay - kind of like tax. But don’t forget that super is YOUR hard earned money that is going to allow you to retire earlier and enjoy life when you want!

It is important to get your super running super healthy, so you can have a super retirement (OK, enough with the pun’s I get it). Before you make any decisions on what you want to do with your super, you need to know what it is and how it works. That’s why we’ve gathered some information for you so you can feel confident that you’re doing the right things to ensure you’re maximising your retirement wallet!

So…I think I know what superannuation is, but can I get a definition in one sentence?

Superannuation is money paid into a fund by your employer to enable you to save for your retirement.

As my super is to help me save for retirement, can I access this when I decide to retire at an age I choose?

No, you must reach preservation age to access your superannuation and be permanently retired or have reached age 65. Preservation age is currently between age 55 and 60, depending on when you were born.

But what if I REALLY need to access my super before I reach preservation age?

There are ways you can access your super early i.e. Financial hardship, terminal medical condition, compassionate grounds. Each case is assessed and evidence is needed to ensure you are eligible.

OK, so who pays into my super?

Your employer legally must pay a minimum of 10.5% of your annual salary into your super account. You can make personal super contributions yourself in addition to what your employer pays.

I’m self-employed, so must I pay myself super?

It’s not illegal to not pay yourself super. Apart from not being able to save for retirement if you don’t make contributions, you will have to pay more tax. Why? You get paid less tax on earnings within super. Also, the returns you make from your super fund are generally much higher compared to what you’d make if your money is sitting in a bank account.

What is the maximum amount of money I can pay into my super for the financial year?

If you make concessional contributions (payments made into your super fund before tax), the yearly maximum is $27,500. Your concessional cap may be higher if you did not use the full amount of your cap in earlier years. This is called the carry-forward of unused concessional contributions. You can also make non-concessional contributions (payment made into your super fund after tax income) of up to $110,000 per year. If you make contributions above the annual non-concessional contributions cap you may be eligible to automatically gain access to future year caps. This is known as the bring-forward arrangement. It allows you to make extra non-concessional contributions without having to pay extra tax.

I have heard of salary sacrificing into super, what is that all about?

This is an agreement between you and your employer to pay a portion of your pre-tax salary concessional contribution to your super account. This strategy enables you to save on tax payments, while building your super balance. Head to the MoneySmart website for more information on how this works.

During my high school years, I had several jobs, mainly working in hospitality. I have noticed my past employers have set me up with difference superannuation funds. I remember one of my employers telling me that it’s just easier for them to pay all their employers under the same fund instead of multiple ones. Can employers do that?

No, they may offer to set you up a new account but it’s your choice where you want your super paid.

Great! So because of the above, I have multiple superannuation accounts, is this a big deal?

In a way yes, if you aren’t receiving contributions into a certain fund, the balance could be decreasing because of the fees you have to pay to have the account active. In addition, your super fund may hold a default life insurance cover which is deducted from your super account balance. If you have multiple super accounts, you may be paying insurance premiums on all of these accounts, However, you can only claim on one policy, which effectively means, you’re flushing your money down the drain!!

Yikes!! How do I find out where all my super is?

You can check your super by registering to the ATO online service via myGov.