The aim of superannuation, since its introduction by the Keating Government in 1992, is to enable all working Australians to accumulate savings to fund their retirement. The most common means of contributing to superannuation is through employer superannuation guarantee contributions (SGC), which by law, must currently be paid at a rate of 9.5 per cent. There are plans to gradually increase this to 12 per cent by 2025.
Australians are encouraged to make contributions to superannuation by favourable tax benefits and many take advantage of these incentives by salary sacrificing to superannuation. This enables an employee to pay an amount of pre-tax salary into superannuation, which when taxed at 15 or 30 per cent, is often less than their own marginal tax rate. These are known as concessional contributions and are capped at $25,000.
Non-concessional contributions can also be made – these come from after-tax income. The current limit on such non-concessional contributions is $100,000 per year, although a scheme exists whereby $300,000 can be made in one year, as long as no other contributions are made in the following three-year period.
Other factors, such as age and hours worked, can determine whether an individual can contribute to superannuation.
Through investment of contributions by fund trustees, individuals hope to see their superannuation fund balances increase by payment of returns on investment and compound interest. As investments can go down as well as up, most people choose a mix of different investment types based on their risk profile.
Superannuation is considered a household asset, but after divorce or separation some women are
Addressing incomes is important, but there is more the government can do.
The most common rip-offs that could derail your retirement.
A result that would have been inconceivable a year ago is now looking very likely.
The digitisation of economies and work automation are helping retirement savings grow.
Comparison sites can help you choose a fund, but there's a catch.
Laws rushed, say opponents, while supporters say they put fund members first.
Peak super body disputes government finding that retirees hoard their assets.
Industry-accepted nest egg for a comfortable retirement 'not adequate'.
ATO confirms increases to a number of superannuation key rates and thresholds.
Banking executive says cyber attacks are 'the single biggest issue' facing the sector.