What is superannuation?

If you are a new resident or starting at your first job, you may have stumbled upon an additional line on your payslip that says ‘superannuation’ and thought free money? ​

While it’s true that your employer is paying this on top of your regular pay, it doesn't go into your pocket. Instead, it’s paid to a fund that will invest your money for you.  
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This is called superannuation. 

Why don’t they pay me directly?  
Superannuation is not paid directly to you, but to a superannuation fund. They take your contributions and invest them, utilising the power of compounding returns to grow your money for you.  

There are a few reasons for this, such as: 

1. Generally speaking, the longer your money sits in your super account, the more it will grow. That means more money to retire on. 
   
2. It’s not easy to access, which means you won’t dip into it unless necessary (while it may seem slightly unfair now, your older self will be glad that you didn’t spend it all at once!) 

This process also ensures you aren’t fully reliant on the age pension. Some retirees don’t have a lot in super and rely fully on the age pension, which may not meet the needs of their lifestyle. Investing in super gives you a buffer, or in some cases can fully fund your retirement without any assistance from the age pension.  
 
What now? 
The primary goal for most people is to retire fully self-funded. This means that they aren’t reliant on the age pension, but instead fund your retirement from your superannuation, investments, or savings.  

For many people, super is the best way to save for a self-funded retirement.  

We recommend regularly reviewing your super to ensure your accounts remain active, cost-effective, and bringing in strong returns.  

To find out more about superannuation, access the ATO website or give us a call on 07 4766 9688.  ​