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10 Major Benefits of Having Superannuation for Retirement
Saving for
retirement is one of the wisest things you can do with your money. However,
about 1.7 million Australians don’t have a superannuation for their retirement.
Scary right? Maybe they made other plans, or maybe they’re loaded with enough
cash to last them without a retirement fund. Still, think about what would
happen if you got to the ripe age of 70 years old and had no retirement funds –
you would literally have to work till the day you die. That’s why it’s so
important to consider paying into a super fund as early as possible.
But what
are the benefits of a superannuation fund other than having money set aside for
your retirement? That’s exactly what we’re going to discuss in this article, so
continue reading to find out.
What
is Superannuation?
Superannuation
is an Australian pension fund program run by companies to aid employees in
their retirement savings. It usually involves deducting a portion of their
salary, which goes to the fund. Like other retirement plan funds,
superannuation will appreciate in value until the set age of retirement.
Financial advisors usually help clients or businesses with their superannuation
programs to ensure deductions are set appropriately.
The
benefits of having superannuation for retirement
Any kind of
saving towards a goal is always beneficial, but saving for your retirement is
particularly beneficial. Here’s why:
1. Pay
less income tax
The
Australian government wants citizens to still be able to live sustainably when
they retire. For this reason, they allow superannuation savings to be tax
deductible. This means that if you pay into a superannuation every month,
you’ll pay less tax.
We all work
hard for our salaries, but tax is a reality for all of us. That’s why paying
into superannuation is so important. It helps you maintain a larger percentage
of your salary and put it forward to saving for your future.
2. More
affordable car insurance
Many Super
funds will come with a few benefits if you purchase products with the same
company or affiliation. These benefits can include vouchers and discounts on
premiums. One amazing discount is getting your car insurance at a discounted
rate. While this does depend on the fund you’re using, saving on car insurance
is a massive bonus!
If the
option is available, you can also use your super fund to pay for your insurance
premiums. While this might mean you’ll get less when you retire, it sure does
save you cash in the present.
3. Ensures your financial security upon
retirement
Paying into
superannuation offers financial security for when you get older and are unable
to continue working. We can’t avoid old age, but we can prepare for it, so it’s
best that we do so properly. We’ve seen far too many cases where people retire
and haven’t planned for their retirement properly. As a result, they have to
move in with their children or become a financial burden to them.
4. Discount,
discounts, discount
As we
mentioned earlier, you can get cash from your premiums for products affiliated
with your Super fund. But you can also get some pretty amazing discounts from
associated stores or products. There are also membership rewards and points
that can be collected and built up until you’ve received enough points to cash
them in for a free meal or even some merchandise.
5. Less
tax on investment returns
With a
super fund, your investment returns have less tax on them. This could equate to
around 15% for investments and 10% for capital gains. You can even use your
super fund as an income stream when you retire and earn a tax-free salary.
6. The government does a co-payment
With a
super fund, the government might co-contribute the amount going in as a way to
incentivise your saving for retirement. However, they only offer this for low
to middle-income earners and there are some things you’d need to do first like
paying extra into your super fund, providing your tax number to the financial advisors overseeing your fund, and earning under $58,
445 for this tax year (23-24).
7. Advice
for no extra cost
Generally,
when you get a superannuation account going, it comes with a financial advisor
who’ll include the cost of managing the fund and giving you advice in your
super fund account. This kind of advice can save you loads of money if you’re
connected to the right person. A financial advisor would help you set up a
super fund in a way that maximises your benefits when you retire but also works
for you at your current stage of life.
8. Fast-track your first home savings
You could
use the First Home Super Saver Scheme, a program that the government set up to aid people who are buying their first homes. This scheme will
help you consistently save for a deposit until you’re ready and from there
you’ll be able to buy the home of your dreams, or at least a stepping stone to
it.
9. Your
savings are protected
If you’re a
business owner and have wrapped a lot of your personal finances up as assets in
the business, there’s a good chance that you could lose it all if your business
has to declare bankruptcy. But, if you have savings in superannuation, you’re
covered because you’ll still have something to fall back on.
10.
Invest in Exclusive Private Assets
Superannuation
works like a large investment portfolio, pooling your savings with those of
other members. This collective buying power allows super funds to invest in
exclusive private assets like airports and motorways. These are unique
investment opportunities that typically aren't available to individual
investors.
Leverage
the Power of Large Funds
Being part
of one of Australia's largest super funds means you benefit from our ability to
make substantial investments to grow your super savings. Our size and
scale give us access to investment opportunities that smaller funds might miss.
Check out our investment performance to see how we’re working to grow your
savings.
