Superannuation is a cornerstone of financial planning for Australians, yet many people don’t fully understand how it works or why it matters. As Perth’s trusted insurance advisors, we’re here to demystify super and help you make informed decisions about your financial future.
What is Superannuation?
Superannuation, or ‘super’ as it’s commonly known, is a compulsory retirement savings system in Australia. It’s designed to help you build a nest egg throughout your working life that will support you financially when you retire.
Your employer is required by law to contribute a percentage of your salary (currently 11.5%) into your nominated super fund. These contributions are in addition to your regular salary and are known as the Superannuation Guarantee (SG).
Why Superannuation Matters
Super is more than just a mandatory savings account – it’s a powerful tool for building long-term wealth:
- It provides financial security for your retirement years
- Contributions are generally taxed at a lower rate than your income
- Your super benefits from compound interest over time
- It often includes insurance coverage for death and disability
Types of Super Funds
There are several types of super funds to choose from.
Industry funds
Originally created for workers in specific industries but now often open to everyone
Retail funds
Run by financial institutions and available to anyone
Public sector funds
Designed for government employees
Corporate funds
Established by employers for their employees
Self-managed super funds (SMSFs)
Privately managed funds where members are also trustees
Making the Most of Your Super
To maximise your retirement savings, consider these strategies.
1. Consolidate multiple accounts: Having your super spread across different funds means paying multiple sets of fees
2. Make additional contributions: Contributing extra to your super can boost your retirement savings significantly
3. Check your insurance coverage: Many super funds include life and disability insurance
4. Review your investment options: Different investment strategies offer varying levels of risk and potential returns
Super and Insurance: A Critical Connection
Many Australians don’t realise that their super fund often includes insurance coverage. This typically includes:
- Life insurance (death cover)
- Total and Permanent Disability (TPD) insurance
- Income protection insurance
However, the default coverage provided may not be adequate for your specific needs. That’s where personalised advice becomes invaluable.
At Absolute Insurance, we understand that superannuation and insurance planning go hand in hand. Contact our Perth team today for a free consultation about your superannuation and insurance needs. We’re here to help you navigate your options and create a plan that gives you peace of mind for the future.
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