Superannuation, a particular description for your retirement fund is a prevalent initiative in most Western Countries. In many countries, it is even mandated by the Government whereby employers are required to pay a percentage amount of an employee’s salary into a separate account, usually a superannuation fund. This amount is saved up until you reach the conditions of release, either because you have reached a certain age, usually 65, or because you have an illness, or you meet another condition of release, as outlined by the Government.
Over a long period of time, the rules and regulations with regards to your superannuation has evolved, and is continuing to evolve, so it is essential to keep track of it. This includes legislation, regulations from the authorities, legal precedents, etc.
For example, one rule that covers superannuation is the Superannuation Guarantee law. Workers between 18 and 70 years of age and earning over $450 per month are covered by the Superannuation Guarantee Law, which means their employer is required to pay an additional 9% of their wages into their superannuation fund. In addition, people can also choose to contribute directly to their superannuation fund. In some cases the Government will pay an additional amount for every dollar you have contributed to your retirement fund voluntarily. This is called the Government co-contribution scheme. To further boost your super fund, you can also opt for setting aside a certain amount from your salary to contribute to your superannuation fund automatically each month.
Whether you are with an industry super fund or a self-managed super fund (SMSF), it is a strict rule that you can only access your funds when you meet the conditions of release. This could be meeting your retirement age age, which is 65 years old and no less. But there are special circumstances where the government allows you to access your super fund earlier. An example is when you are sick and the expenses incurred are not paid for by Medicare. Another special circumstance is overseas citizens working in other countries temporarily. In most cases they can access their superannuation when they leave the country for good.
Depending on what kind of superannuation fund you choose, there are certain rules of how you can invest your money. You can choose the type of superannuation funds that best suits your circumstances, whether an industry fund, a self managed super fund (SMSF) or another type of fund. The most common ones are the Public Sector Employee Funds (for public employees), Employer Stand-alone Funds (created by employers for their employees), and the Self-Managed Super Funds (you can manage your own funds with strict regulations from the government).
If you have been keeping up with Australian Superannuation Rules, you will notice that there have been changes over the years. However, all changes are aimed to improve how people manage their superannuation and benefit from it.
Having a professional explain the details on how you can manage your funds is always a good choice. You can seek independent expert advice from lawyers, financial planners, superannuation accountants, independent SMSF auditors or any other industry specialist.