What is Superannuation?
Believe it or not, superannuation is like a savings account for your retirement. As much as it sounds ridiculous to plan for your retirement when you are young, your employer will contribute a certain amount of your pay to your superannuation fund for you.
It is compulsory for most employers to contribute to super and contributions must be equivalent to at least 9% of your earnings. But don’t worry – the money will not be coming out of your pay packet – it should come from your employer directly.
Your employer will probably have a super fund of their choice to send your money to, and that’s ok. Just remember when and if you move jobs you need to consolidate your super funds so all your money is in the same place. That way, not only will you receive a better return on your investment, but you will also know where your money is without the risk of losing it! If you already have a fund or want to set up your own you are allowed to do that too.
You can even add your own contribution to the fund if you’d like. Ask your employer or super fund how you can make extra contributions to your super fund. If you make extra payments, you might be eligible for the Government’s Superannuation Co-Contribution scheme, where the Australian Government contributes the same amount you contribute personally. Yes – that means free money!
You cannot access your superannuation money until you are old enough though. For us Gen Ys, that’s probably until we’re about 70 years old… [at the moment, it stands at 60] There are special circumstances where you can have access to the money, such as permanent incapacity and severe financial hardship – but let’s hope this never happens, ok?
If you’re an international student on a temporary visa and moving back home permanently you might be eligible to collect your superannuation. To find out more information check the Australian Tax Office (ATO) website or phone the Superannuation Infoline on 13 10 20 (within Australia) or email email@example.com (outside Australia).