Superannuation, sometimes called ‘super’, is a special way of saving to provide you with an income when you retire. While there are other ways of saving for retirement, superannuation saving is different because it is linked with your employment. Your employer may be required to make superannuation contributions on your behalf to a special fund called a superannuation fund. These funds are special because if they meet certain Government rules, they may pay less tax than if you were to put the money in a bank
There are more tax benefits for you when you retire and take the money out of the superannuation fund. Superannuation savings is important for everyone because it will mean that you can look after yourself better when you retire. Many people rely on the Government’s Age Pension but it is only one quarter (25%) of the male average weekly earnings, about $17,000 per year. You can be better off than if you only get the Government’s Age Pension by having superannuation savings as part of your income when you retire.
Superannuation is also important because as the number of aged people in Australia grows so does the Government’s cost of providing the Age Pension. Having your own superannuation will help reduce the cost of the age pension for the Government. That will then help reduce taxes for everyone. Superannuation also helps the Government to achieve another goal – increasing national savings. National savings can be used by Australian businesses to create jobs.
More benefits of superannuation!
Another good thing about having superannuation is that many superannuation funds provide insurance in case you are seriously injured, become unfit to work or die. This insurance cover is called Death and Disability cover. The insurance may pay a regular income to you or your family in the above cases. It is important that you make sure your employer keeps their contributions up to date because if they don’t it might mean that you or your family would not get any payment if any of these things happen to you.