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The Village Idiot’s Guide To Superannuation – Cash Money Lessons Issue 04

Superannuation

I’m sure when you make a list of ‘things I want to do this weekend’, thinking about your superannuation doesn’t spring to mind. It’s probably not on the ‘things I want to do next weekend’ list either.

The nature of super is that it’s a really long-term investment and how you manage it in the early years, good or bad, will compound over the next 40+ years. Whether you aspire to survive in retirement on a strict diet of Viagra and poolside martini’s or are a little more traditional in your approach (mortgage free with a few extra dollars for a holiday), the time to start working towards that goal is right now.

Know The Basics

A super account is basically just an investment account that the government forces you to put money into and won’t let you access until a certain age. Your employer pays the mandatory contribution from your salary, currently 9.5% but increasing to 12% by 2025. All fund providers charge you fees for the privilege, but these will vary from fund to fund.  Sometimes you might also have insurance with your super fund which means you’re paying premiums as well.

“The nature of super is that it’s a really long-term investment and how you manage it in the early years, good or bad, will compound over the next 40+ years.”

Keep Track Of Your Quatloos

A lot of people will have multiple super accounts from different jobs. Prioritise rolling them into one and stop paying multiple sets of fees. Create a myGov account and link up with the ATO and you’ll be able see all your super accounts, including ones you may have lost track of. They can also help you with the consolidation process.

Be Proactive

Despite the recent proposed changes to super, it can still be a pretty tax effective way to save for your future. Speak with your accountant or financial adviser about putting extra money into super before June 30, which might help reduce your tax bill this year. They’ll also be able to advise on super strategies such as salary sacrificing and self-managed super funds for those with significant savings and an active interest in running their own investments.

Luke Laretive is a Senior Private Wealth Adviser @ Shaw and Partners. This is general advice and you should consider it in light of your personal circumstances.

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