Superannuation is a way of putting money aside now so you have money for your retirement once you stop working. Though mandated by the government, making smart contributions over the course of your life is an investment in your future and could mean the difference between a modest retirement and a comfortable one.
How does superannuation work in Australia?
If you’re earning more than $450 a month your employer must pay a portion of your income into a super account of your (or in some specific cases, their) choosing; currently this rate is set at 9.5% of your annual salary (known as the ‘superannuation guarantee’).
You can elect to increase this percentage or make one-off voluntary super contributions
, which often comes with tax benefits.
This money is then invested and compounds over time, possibly leaving you with significantly more at retirement than your savings alone. There are many ways to invest, and Rest can help you decide the right super options
for your lifestyle.
Tip: Super is a long-term investment that often goes up and down, so it’s important you don’t react too harshly to small drops in your account balance.
When can I access my superannuation?
The government has what’s known as a ‘preservation age
’ which legally restricts when you can access your super. This is between 55 and 60, pending when you were born and if you are completely retired.