12 benefits of super
Most of us know what superannuation is and what it can do for us, however this is just the tip of the iceberg. There are plenty more little-known benefits that you have access to if your super is with the right superannuation fund, and you’re making sure it’s working for you as best as it can, both in your working life and in retirement.
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1. Pay less income tax
With a salary sacrifice agreement with your employer, instead of paying the income tax rate you’d normally pay based on your salary, your contribution will be taxed just 15%. Voluntary after tax super contributions are also beneficial and you may also be able to claim a tax deduction for these contributions. Just be mindful of super contribution caps.
2. Also pay less tax on investment returns
When you invest outside of super, any income earned is taxed at your marginal tax rate. Within super however, the investment earnings your super balance makes while in your accumulation account are also generally taxed at the low rate of 15%. (But of course, these savings are locked away until you retire.)
3. Cheaper insurance cover
Since super funds can negotiate group discounts on insurance premiums, they typically pass these savings on to members. Comparatively, insurance outside of super, tends to be more expensive. Also, the advantage of insurance through super is that the premiums are deducted automatically from your super and there’s no need to worry about paying premiums with your after-tax earnings.
4. Automatic insurance cover with no health checks
Most super funds generally automatically offer new members death and total and permanent disability (TPD) insurance through their super. This may be much more cost effective than taking cover outside of super, especially if you’re older or have certain health conditions that may generally be excluded.
5. Ensure your super goes to the right person
For most Australians, super is their second largest asset after their family home. What a lot of people don’t realise however is that super does not automatically become part of their estate on death and is therefore not covered by their Will. With a binding beneficiary nomination you can ensure your super goes to the right person when you die. A binding beneficiary nomination just needs to be witnessed and sent to your super fund, and is valid for three years – there is no need to go through lawyers, and it gives you peace of mind that your super benefit goes to your intended beneficiary.
6. Your super is protected against bankruptcy
As long as your superannuation savings are held in a regulated super fund, bankruptcy will not impact your retirement savings, and your money will be protected from creditors. Similarly, any money withdrawn from your super after bankruptcy, is usually protected. It’s worth noting that any funds that are withdrawn from your super prior to bankruptcy are an asset of the bankrupt estate.
7. Tax free income when you retire
After you turn 60 and retire, you're typically able to access your superannuation without paying tax. This is available to you whether you withdraw money through a superannuation income stream, or a lump sum, provided you’re with a taxed super fund, like Australian Retirement Trust.
8. Extra money from the Government
If you’re not on a high income, and you make voluntary after tax super contributions, you can grow your super even further by getting an extra boost from the government co-contribution.
You must contribute to your account by 30 June each year, and the government will determine your eligibility. Your super fund must also have your TFN on file. This could be really valuable if you or your partner go on parental leave, and therefore receive a smaller portion of your ordinary income.
For more details view our government co-contribution page.
9. Additional employer contributions
Generally employers are only required to pay super at the compulsory rate of 10.5%, however some employers have special arrangements in place and choose to pay a higher rate of super. For example, if you elect to contribute additional super through a salary sacrifice arrangement, your employer may match that additional super contribution amount, giving you additional super. Whilst not available with all employers, a number of Australian employers have a system in place that can essentially give employees additional super, so it’s worth checking to see if they offer this as an employee benefit.
10. Advice included in your membership
Most large superannuation funds offer advice to existing members, with the cost of advice about your super account included with your membership. This is a huge benefit as when searching online for advice about super you’ll mostly only find tips of a general nature. Speaking with a qualified financial adviser on the best way to manage your individual super will help to ensure your super grows and you are on track for the retirement that you desire.
11. Ability to invest in big assets
Because superannuation is one big investment portfolio and your money is pooled with other members’ retirement savings, you can invest in assets you typically wouldn’t be able to access as an individual investor. With all that buying power, superfunds can invest in private assets such as airports or even motorways. This can give you a unique opportunity to be a part of investments that aren’t publicly available.
12. Discounts and rewards
Some super funds offer their members exclusive discounts and gift cards that they can purchase for a discounted amount online. Australian Retirement Trust offers Rewards in which you can pick up everyday savings on things such as your grocery bill or gym membership. Explore our Rewards offers online.
If you want to take advantage of some of these benefits with Australian Retirement Trust, you can join online in just a few minutes.
Before joining Australian Retirement Trust, consider the potential loss of insurance and other benefits that you may have in your other funds. The information contained on this website is general information only and does not take into account your individual objectives, financial circumstances or needs. You should consider your own objectives, financial circumstances and needs, before making a decision about the financial product. Also, think about where your future employer contributions will be paid. You should consider the Product Disclosure Statement and Target Market Determination before deciding whether to acquire, or continue to hold the product. For more information or financial advice from Australian Retirement Trust, call us on 13 11 84.