Are you feeling overwhelmed by the thought of retirement? Are you worried that your superannuation may not be enough to support you during your golden years? If so, then you are not alone. But worry not as we have some superannuation advice that will help put your mind at ease and ensure a comfortable retirement for you.
Superannuation: What Is It?
Superannuation, or pension, is money that is set aside by an individual during their years of employment to fund their retirement. It is generally contributed to by both the employee and employer, with the intention of providing financial support after retirement.
Why Is Superannuation Important?
In Australia, superannuation is compulsory for all employees, with the current contribution rate set at 11% of an individual’s salary — and is going up to 11.5% on 1 July this year. This means that a part of your income is being set aside for your retirement by default. Superannuation is important because it ensures that you have enough money to support yourself when you are no longer able to work.
Tips for Maximising Your Superannuation
Now that you understand the importance of superannuation, here are some tips to help you maximise your savings and secure a comfortable retirement:
- Start Early
The earlier you start contributing to your superannuation, the better. This is because your money has more time to grow and compound over the years, resulting in a bigger balance by the time you retire.
- Contribute More
While the current contribution rate of 11% may seem like enough it is recommended to contribute more if possible. By contributing extra funds you can increase your savings and have a larger balance at retirement.
- Consider Salary Sacrifice
Salary sacrifice is an arrangement where you agree to have a share of your pre-tax income contributed to your superannuation. This reduces the amount of income tax you pay while also increasing your super savings.
- Consolidate Your Super
If you have multiple super accounts it is advisable to consolidate them into one account. This will help you save on fees and make it easier to track and manage your funds.
- Review Your Investment Options
Most superannuation funds offer a range of investment options, each with varying risks and returns. It is important to review these options and choose the one that best suits your risk profile and retirement goals.
- Seek Professional Advice
Navigating through the world of superannuation can be complex and overwhelming so it is always a good idea to seek professional advice. A financial advisor can help you make the most of your superannuation and provide tailored advice based on your individual circumstances.
Superannuation is an indispensable component of planning for retirement. By understanding its importance and implementing the tips mentioned above, you can maximise your savings and secure a comfortable future for yourself. Remember, it is never too early or too late to start planning for your retirement. Contact us for more superannuation advice.