For those that are living in Australia, the superannuation fund is a way for the government to provide a form of retirement for the citizens of this country. It allows them to accumulate funds, in a private retirement account, that is partially compulsory. Employers must contribute to this fund, as must the individuals, and the government also plays a role in building this up.
It is designed in a way to make sure that people are able to look forward to their retirement without fear of not being able to survive. In 2017, there have been a few changes which are beneficial for those that are in this country. Let’s take a look at the Australian superannuation guarantee obligations 2017 to show you how things have improved.
Why These Funds Are So Important
Before discussing the superannuation fund in Australia, it’s good to know why this actually exists. It is designed to provide retirement for people that otherwise would have forgotten to do so on their own. The government realized long ago that they need to do as much as they can for their people, and with the higher tax rates, they decided to invest this money back into those that are providing them with the taxes. That being said, let’s look at how this actually works and then any changes that will occur in 2017.
What You Should Know About The Superannuation Fund In Australia
Currently, the employer contribution rate has risen to a level of 9.5%. It has been this way since 2014. It will eventually maxed out at 12% which is going to happen in 2021. The contributions going into this fund are invested in such a way that the fund will continue to build. Currently, or at least as of June 2015, there are superannuation assets that are in excess of $2 trillion.
Once a person reaches a certain age, they will be able to begin drawing this money out. It will allow them to pay their bills every month, and look forward to a retirement that will not be based upon black. It is a very wise thing that the Australian government has designed, but there are some drawbacks that need to be considered.
Salary Sacrifices For The Contributions
One of the main complaints from those that are in Australia is the amount that is actually taken out of their salary. There are some people in this country that pay over 40% in taxes, and then they have almost 10% more taken out for this fund. Essentially, half of the money that you earn is going toward the government, and your retirement fund, even though you may have an exceedingly high paying job. However, people need to understand that it is the money they are putting away now that is going to make it possible for them to retire with plenty of money, and to contribute to Australia which is also contributing back to them.
Getting Access To Superannuation Funds
The superannuation funds are going to be available to people that reach a certain age. For example, prior to 1960, the preservation age was 55. Today, you must be 60 years of age or older in order to access the superannuation fund. Those that are between the age of 60 and 65 can access this even if they want to continue working. You can even work a second job where all of the money is taken out, deposited directly into the fund, for those that would like to build it up much more quickly.
Comparison To The New Zealand KiwiSaver Fund
Some people will actually compare the superannuation fund to what is available the New Zealand. This is called the KiwiSaver program and it works in a very similar way. It is possible to use this money for a multitude of different reasons. For instance, there are ways that you can borrow part of this fund if you would like to invest into real estate.
It is sometimes hard for people to come up with a down payment for a piece of property that they would like to purchase. That is why putting money into these funds is so important because the act as a savings account that is not only for your retirement, but can also be used for investment properties that could actually generate much more revenue.
Australian Superannuation Guarantee Obligations 2017
The Australian superannuation guarantee obligations 2017 changes that have been made are actually very subtle. Currently, the superannuation guarantee rate is still at 9.5%. This will also be the same into 2018, after which further increases will happen in 2021. For now, the only major change has been in the tax rate which will change in July which will be 27.5% applying to companies that have aggregated annual turnover that has not yet cleared $25 million.
This is just a basic overview of what you can expect as a result of the Australian superannuation guarantee obligations 2017. It is something that is so beneficial for people that are going to retire, especially when you compare that to what people may not have in countries like the United States. It seems that both Australia and New Zealand have been thinking ahead, making sure that they can create a balanced country where their people are not only safe but well taken care of. It may only be a few short years or some Australians before they can access this money, and they will certainly be glad that it is there.