Saving for the future is becoming more and more difficult and many senior citizens around the globe are finding it harder and harder to make ends meet once they reach retirement age and no longer able to work. Australia seeing this looming problem years ago decided to take action and see that those workers who have dedicated their youth to providing for their families and paying taxes to the government should have the necessary money to survive their old age and a chance to enjoy their golden years. Superannuation in Australia is designed to help provide today’s workers with an income tomorrow.
Super is money that is set aside over your working lifetime to provide for your retirement. It begins when you start working. Australian law provides that each employer pays a percentage of every employees income into a superannuation account which the employee is then entitled to draw upon after retirement or at age 65 even if he is still working. While the biggest share of this “retirement fund” comes from the employers and employee over their work career there may also be under some circumstances co-contributions by the government and you as an employee may contribute to the superannuation fund your self in order to insure that you have enough money to live on once you retire.
With the growing rate of inflation, those who are employees who can should pay into their superannuation fund and not simply depend on the money provided by your employer. This will help insure that you have more money to provide for your living expenses and needs once you retire and have no added source of income.
There are cases where withdrawing some of these funds are allowed before retirement but, such withdrawals follow strict guidelines and are usually reserved for medical expenses and other such pertinent needs. Keep in mind that the superannuation fund is a retirement fund not a private bank account where you can withdraw money for minor expenses. Under certain conditions these benefits or a portion of them may be paid to surviving spouse in the case of your untimely death.
Once you retire some of this superannuation income may be taxable some may not. If you are wondering or concerned about how much of your super may be taxed there are places that can and will help you figure out the taxable from the non taxable income. If you find that your employer is not paying into the superannuation fund like he should there are also places who can look into that for you.
Temporary residents who work in Australia and whose employers paid into the superannuation fund for them are entitled to that money and don’t have to wait until retirement to get that money but, rather can apply for it when they leave the country.
Knowing and understanding the laws surrounding superannuation will help you to understand just how well the Australian Government thought thought through what your future needs would be. MLC offers competitive Superannuation offers for Australian residents and businesses, we recommend them.
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