News
Live updates: Australian stock market rides record wave of Wall Street rally as Bank of Canada cuts its spot rate
On July 1, Stage 3 tax cuts come into effect and the Super Guarantee increases by 0.5 per cent, making this a good time to get to know your Super and make sure it’s working for you, says AustralianSuper’s Peter Treseder.
“Super can be ‘set and forget,’ but it may be better if you interact with your super,” he says.
He says people should also check their insurance coverage, noting that standard insurance is often not enough for the average Australian.
“Compare the cost of increasing to a suitable amount with an external provider, it’s usually cheaper with your super fund and you don’t have to pay the premiums from your post-tax salary as it comes straight from your super,” he says.
Australians may also want to consider the tax concessions available in super compared to investing outside of super.
“By salary sacrificing, you are asking your boss to put a dollar you earned into super instead of paying that $1, so it goes into super and for those earning $250,000 or less, they are taxed at just 15 percent,” he says.
“If you took that dollar home, it would be taxed at your marginal tax rate, generally around 30% for most people.”
But he says “remember that money contributed to super is locked in super until you turn 65 or retire”.
“Of course, this is just general advice and does not take into account your personal goals, financial situation or needs. Therefore, before making a decision, you should consider your financial situation and the contribution limits that may apply.”
It’s also worth checking your fund’s fees and performance – some funds have higher fees and perform worse than others – as I explain in this article here: