What is Super?
Super (Superannuation) is a form of forced savings. It is paid by your employer, invested on your behalf, and used to fund your lifestyle in retirement.
Your employer needs to pay a minimum of 10% of your ordinary time earnings into a super fund. Your employer will set up a superannuation account for you unless you have not told your employer your super fund details.
The Super Fund is managed by a Fund Manager. The Fund Manager invests the money paid into your superannuation account in the way you have asked.
For instance, you may have told them you want your money to be invested conservatively, into low-risk investments, so they will invest your money into investments that have been classed as low risk.
Perhaps you have told them you want to be more aggressive and so want them to invest your money into higher-risk investments; they will invest your money into more aggressive products.
When is Superannuation paid?
Your employer must pay superannuation for you if you are:
- Aged between 18 years old and 69 years old, and are paid $450 or more (before tax) in a calendar month.
- under 18 years old, being paid $450 or more (before tax) in a calendar month and work more than 30 hours in a week
Super is paid by your employer into your Super Fund on or before the 28th day after the last day of each quarter. These dates are set out below:
|Quarter||Period||Payment due date|
|1||1 July – 30 September||28 October|
|2||1 October – 31 December||28 January|
|3||1 January – 31 March||28 April|
|4||1 April – 30 June||28 July|
When can Super be accessed?
The money invested in your name in Superannuation is “locked away” and – with a few exceptions – is not able to be used by you until you have retired from working. Most people in Australia retire at the age of 65.
Please read our General Advice Warning.
Have a look at the Australian Taxation Office’s website for more information, or contact FinAdvice Financial Planning to discuss how we can help you manage your super.
How much do I need?
Most people now expect to live well into their eighties, so if you stop working at 65, you’ll need retirement income for about 20 years.
How much you need set aside in Super depends upon your needs and expectations.
If you own your own home, to maintain your pre-retirement standard of living after you’ve retired, a rule of thumb is your investments will need to annually generate two-thirds (67%) of your pre-retirement income.