Superannuation

Retirement is another life many people look forward to. For some, they begin to count down from the first day of their work. It is a phase where people can finally get the relaxation they have earned for years, and do whatever they want any time of the day.

However, what makes retirement memorable isn’t more about the relaxation but the comfort and financial security. Those that have learned about it have keyed into Superannuation to help them secure their retirement life. If you haven’t keyed into it, it is not a difficult thing to do.

Superannuation is a retirement monetary policy program by the government or the company you work for where you are encouraged to deposit money in the superannuation account and grow it. At the same time, you maintain your stream of income.

The purpose superannuation is so you can have access to a pension fund when you retire. In Australia, although Superannuation is made compulsory through government’s policies, there is still some encouragement in terms of tax benefits from the government.

For employers, it is compulsory to make superannuation contributions (called superannuation guarantee). And today, they get valued at 9.5% of the employees’ Ordinary Time Earnings on behalf of their employees.

Money put in a superannuation account will grow in without any tax implications until the employees retire or decide to withdraw. In most cases, money in the superannuation account is so much that the retirees do not have to concern themselves with exhausting the amount in the account.

The superannuation fund is not available for a person while he is still actively in work; only a retiree is eligible for the fund.

A person is deemed eligible for a superannuation fund upon the attainment of the retirement age of 60, and in most cases, sign off that they do not intend to work for the rest of their life. Or, if they work, not more than forty hours in a month or thirty days. If an employee proves infirmity, such employee can access the superannuation fund.

In Australia, you can categorise superannuation benefits into three:

Preserved Benefits

This is a kind of superannuation fund that is locked up until the employee reaches a certain age. Typically, at age 55 or when the employees reach their “preservation age” which varies owing to the employees’ date of birth, the fund is made available to them.

Restricted Non-Preserved Benefits

This kind of superannuation fund does not get preserved. Still, an employee remains restricted from accessing the funds until they have terminated their employment in their employers’ superannuation scheme or they have met any other stipulated conditions.

Unrestricted Non-Preserved Benefits

You can access this kind of superannuation fund at any point in time since they are not restricted. Mostly, it is because the employee has previously met the conditions for release and has not accessed the fund then.

The superannuation fund is quite different from other retirement schemes because market fluctuations do not determine it. Hence, it is predictable, fixed and not affected by an individual’s retirement choices.