With all the hype about superannuation, it is common for working individuals to forget that it is a form of saving. And whether you are just starting your career or are close to the retirement age, superannuation is critical. In this post, we share some of the top reasons why you should contribute to your superannuation.
1. You Know It Will Stay
Unlike other forms of saving, you will be sure that your superannuation will stay as you get close to your retirement age.
Here is why.
You generally cannot access your superannuation savings until you retire or reach your preservation age ranging from 55 to 60, depending on your date of birth. So contributing to your superannuation is like investing in a bank account that you can withdraw cash from. And by the time you reach your retirement age, your saving will stay (and would have multiplied by then).
Moreover, once your retire and your main source of income diminish, only if you have made contributions to your superannuation fund will you have enough funds to cover yourself for the rest of your life. Most people often underestimate the post-retirement expense. If you regularly contribute to your superannuation fund, you will have money that you will need for the rest of your life.
2.The Contributions are Tax-Advantaged
Another critical reason why one must contribute to superannuation is the difference in the tax treatment. For superannuation funds, the government applies a special concessional tax rate that is usually less than the marginal tax rates that you have to pay on the interest income from a conventional saving account in a bank.
If you contribute to your superannuation at the end of the day, you end up saving tax.
3.Your Employer Also Contributes
Perhaps the most appealing feature of superannuation contributions is that the employer also contributes. In fact, a major chunk of your superannuation might come from your employer's contributions, which means that you have enough savings for your retirement.
4.Continued Insurance Coverage
Several superannuation funds continue to provide insurance coverage even if you change your current job. It can be a great advantage, especially if your superannuation offers a higher level of insurance coverage.
You might think of superannuation as something complicated and loaded with a fee but remember, it is your saving that will serve you for years to come. Besides being a great saving for your retirement, superannuation offers several other benefits that you must know because only if you are aware of the perks of contributing to your superannuation will you make the right choice. Get in touch to find out more about the superannuation fund and how you can contribute to it.