Superannuation is the main retirement savings program in Australia. It was introduced in 1992 in response to the demographics change that was taking effect – as protection for the increasingly aging population. It is now considered a leading example of social policy for the aging globally.

Super (as it is sometimes called) is set up with mandatory contributions from your employer each year. While your employer may be making regular contributions, you may also want to contribute to your superannuation account.

Additionally, you need to be able to track the contributions, as well as make sure that you do not lose the account when you move or change employers. You may be eligible for matching contributions from the government if you contribute money on your own.

Employer’s Responsibility

Your employer is required to pay into your super each quarter. They need to pay 9.25 percent of your wages in 2014, which in addition to what they pay to you. The amount is set to go up every few years until maxes out at 12 percent in 2021. Your employer must pay this contribution under certain conditions.

• If you make more than $450.00 a month and you are over 18.
• If you work more than 30 hours a week, even if you are under 18.
• If you are a contractor and are paid hourly, you may qualify for it.
• If you work for your employer overseas, you may still qualify for contributions.

Although your employer is making contributions on your behalf, it is important to think about retirement and how much money you want to have when you retire. You can sign up to have your employer make additional contributions as part of your salary.

This will reduce the amount you take home in pay, but it will increase the amount going into retirement. You need to save aggressively for retirement now so that you do not need to worry about finances when you are older.

Making Additional Contributions

You do have the option to increase the amount that you save in your super by doing your own contributions to your super each year. This is a good idea, because it will increase the amount that you have when it comes time to retire. You have a few ways to do this.

• Salary Sacrificing Super Contributions: This option will have your employer take a portion of what you would be paid in salary and it will be sent directly to your super. This will likely lower the tax rate on those contributions to 15 percent.
• Personal Contributions: You can do a personal contribution if you are not working or if you are self-employed. If you are self-employed your contributions may be tax deductible. You can also make a contribution to your spouse’s super.
• Non-Concessional Contribution: This is an after-tax contribution. You can make it with savings, an inheritance or business income.
• Government Contribution: A low-income super contribution is available if you make less than $37,000. You may be eligible for up to a $500.00 in contributions. You must meet all requirements with employment to qualify for this.

Each year you may choose to make the salary sacrificing contribution, and then make the additional contributions when you receive a windfall or other extra money. If you qualify for the matching low-income contribution, you should try to put the money in so you can get the math. This is essentially free money that can really benefit you in the future.

Choosing the Funds

Each individual has the right to choose the super account they want. When you change jobs, you may want to combine past and older accounts so that it easier to track your contributions and to make sure that you can receive your payments when you are eligible.

You can choose a variety of different account types. You will need to fill out the Standard Choice Form to choose your fund. You will need to have the basic information for the fund including the address and ABN number for the fund. You will need to provide further documentation that the fund is compliant and that they will accept the contributions to your account.

There are a wide variety of funds available to choose from for the accounts. You can choose between Industry Funds, Retail Master Trusts, Wholesale Master Trusts and Self Manages Superannuation Funds. When you choose your fund, you want to find one with a good track record when it comes to the rate of return, as well as one that diversifies the investments which lowers the risk on your investments. You can find additional information on the funds by looking over the funds history.

Take the time to research all of the available options. If you do not choose a fund then your employer can put it into one of the super funds chosen by the government.

It can be overwhelming when you are choosing the funds for your super account. When you are younger, you can choose more aggressive funds that will have a higher rate of growth. Although these may be considered more risky, you will have time to recover if the market dips a little bit.

When you are older and nearing retirement age, in your forties and fifties, you may want to transfer to a more conservative fund that will grow your money slowly. This will ensure that you have the money that you need when you do retire.

Being Responsible for Your Super

It is important that you regularly check on your super account. You need to make sure that your employer is making contributions in the right amount in your account each quarter. You can check your balance to be sure. If you feel that you are not having the right amount contributed you can contact the government to have a review done on your account. The sooner you begin the process, the easier it may be to fully recover the funds.

You should be aware that the balances may fluctuate as the market fluctuates. When you check you should look for the contributions that are being made instead of focusing on the balance.

One time that super accounts become lost is when a person changes employers and opens a new super account or fails to choose an account. Then the employer will simply contribute to an account for you. It is often simpler to have your new employer contribute to your already existing super account.

You can also roll an older account into your current account so that you can easily track your accounts. If you think you may have lost track of an account, you can check the registry online to see if you have a lost account. This will allow you to begin receiving your payments when you reach retirement age.

Be sure that you add your super account information to the list of things that you must change if you move. Your super does need to have your TFN information on it, but you should also keep your address and other contact information updated. This will make it easier to receive payments when you do retire. If you have more than one super account, be sure that you change your address with each of them every time that you move.

Superannuation for the Self-Employed

You are not required to make contributions to a superannuation fund if you are self-employed. You can plan for retirement in other ways. However, there are definite benefits to contributing to a your super fund. Your contributions may be fully tax deductible. You may also qualify for co-contributions. The government can match your contributions if you are a low or middle-income earner.

Limits do apply and it depends on your specific situation. It is worth looking into it. Be sure that you use your TFN when you open your account so it will tie to your already existing super accounts.

If you decide not to contribute to your super fund, be sure that you are making plans for retirement. When you are self-employed, you take on additional responsibility and that includes planning for retirement. You may want to speak to an investment advisor to make plans for your retirement. You need to make saving for retirement a priority, and it is easier to do if you are making regular contributions to your retirement fund.

Accessing Your Superannuation Account

When you have reached your preservation age, you can begin accessing your superannuation account. It is important to realize that this age is not the same age that you will become eligible for a pension. If you were born after July 1, 1964, you can begin accessing your funds when you are sixty. If you were born before that you may be able to access your account earlier, but it depends on your birthday.

You can have the money paid out to you in regular payments when you retire. This can help you transition from working full-time to a part-time job and then into full retirement. If the amount that you have in your superannuation account will not be enough to fully support you, you may qualify for pension benefits.

These will not start until you are sixty-five years old. It is important to save as much as you can so you can retire when you are ready and so that you can live comfortably.

Divorce and Superannuation Accounts

If you get divorced, you may have the option of dividing the superannuation account at the time of the divorce. This generally happens when one spouse has been at home to care for the children or home while the other one has worked the entire time.

This allows the nonworking spouse to be taken care of when she reaches retirement age. It is also another way to equally divide the assets of the marriage. However, you may face tax penalties when you divide the account.