Superannuation is mandatory in most employment situations. Employers will normally ask you for your superannuation details when you sign up for a new role and start making payments into your nominated superannuation account with your pay cycle. However, once this has been completed, your superannuation can be easily forgotten about. There is a lack of personal involvement in your superannuation, the process, and your ongoing balance, which also means that there can be a lack of proper understanding of the important elements of your super account. This blog will explain five things you probably didn’t but definitely should know about your superannuation.
You Can Salary Sacrifice Into Your Super Account.
It can be tax beneficial for your employer to pay some of your pre-tax salary directly into your super account. You have mandatory superannuation payments, however, you can add to these payments from your paycheck. This will be taxed at the super contributions tax rate level, which at 15% is considerably lower than your marginal tax rate. If you want to add to your superannuation after tax, you can do so, and you might be able to claim a tax deduction from this. This would count towards your concessional contributions cap.
Your Spouse Can Contribute Into Your Super
If you are earning less than $37,000 per year, your spouse can contribute to your super. If eligible, your spouse can make a yearly contribution of up to $3000 per year. To be considered for this, your partner must either be married to you or living with you on a genuine domestic basis. By contributing to your super, your spouse can receive a tax offset of up to $540.
Your Fund May Already Be Providing Extras
Superfunds come with a lot of benefits. As part of most super funds, you may also receive low-cost insurance in the form of life, disability, and income protection. These insurance premiums are discounted because the superfund buys insurance in bulk. It’s best to check your superannuation provider for these insurance types and potentially more, as some funds also offer extras like competitive home loans and discounts on holidays, shopping, and entertainment.
You Can Manage Your Own Super
You can have full control over your super account. This is because you can have an SMSF or Self-Managed Super Fund. While this does allow for far more flexibility and control in the decision-making process for how your super is invested and managed than other options, it is a time-consuming process. You will save a lot on fees but it comes with the added responsibility of ensuring that you have the $200,000 recommended balance before you open it.
You can move your super if you change jobs.
Because your super account is not thought about day-to-day, it can be forgotten when you move jobs. However, this can have adverse consequences for your super savings, as you may end up paying fees for several super accounts. All accounts still remain active unless you choose to close them or consolidate super. It is crucial to the health of your savings that you consolidate your super accounts into the lowest fee and highest return fund. If you have not yet consolidated your super, now is the time to do it, with recent changes to the super accounts mean your super will follow you from job to job.
