Superannuation

By: Team Cat

What is Superannuation?

  • Superannuation, sometimes called ‘super’, is a special way of saving to provide yourself with an income when you retire.

What is it used for?

  • Superannuation is a way to save for your retirement. The money comes from contributions made into your super fund by your employer and, ideally, topped up by your own money. Sometimes the government will add to it through co-contributions and the low income super contribution.

How is it Collected?

  • Your employer must pay 9.25% of your salary into a super fund. This is called the Super Guarantee and it's the law. The Super Guarantee is gradually increasing and will be 12% by 2019.
  • Over the course of your working life, these contributions from your employer add up, or 'accumulate'. Your super money is also invested by your super fund so it grows over time. When you retire, you will have money to live off. Super is a lifetime investment that has many benefits. Therefore the more you save the sooner you can stop working.

Advantages & Disadvantages

  • Advantage: its compulsory so the government is not paying for it, therefore you do not have to pay them back
  • Disadvantages: Nil