Highlights
- From 1 July 2021, if an employee doesn't nominate a super account when switching jobs, the employer will make super payments in the employee's existing super account.
- You can only withdraw your superannuation when you retire, turn 65 or on compassionate grounds such as disability, medical treatment or in case of extreme financial difficulty.
- According to Tony Negline from Superannuation leader of Chartered Accounts Australia and New Zealand, regardless of the nature of your work, it’s important to build your retirement savings, and it’s important not to discount the small amounts you put aside today. He also suggests salary sacrifice as one way to build up your savings again.
Superannuation, commonly referred to as ‘super,’ is a part of your income put aside to fund your retirement. A superannuation Guarantee is the minimum percentage of your earnings that your employer must pay into your super. The superannuation guarantee rate is increasing to 10% in July 2021.
Anyone earning more than $450 a month before tax is eligible for superannuation contributions from their employer. But Rashesh Bhavsar, a financial advisor at Melbourne-based Fortune Wealth Creation Group, is concerned that most new migrants have very little idea about how their superannuation works.
“Take super very seriously. It is a part of your income and if you don’t understand, talk to a financial advisor. Just don’t ignore it because that ignorance you will pay a big price in the end.”
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