Superannuation

Superannuation is the money allocated to a dedicated fund throughout your working life, by you or your employer for the purposes of your retirement.

When you’re running a small business and working as a creative professional, often with an irregular income it can be difficult to prioritise allocating money to your super account when you have bills to pay and materials to buy. But making even a small contribution to your superannuation throughout your career could provide you with valuable financial support when you reach retirement age.

With all of this in mind, we’ve talked to our partners at Statewide Super to put together two toolkits to help you understand and make the most of your superannuation.

TIP:

For more information about superannuation, see the Australian Taxation Office website:

http://www.australia.gov.au/information-and-services/money-and-tax/superannuation

If you’re an employee

Generally, if you are an employee aged over 18 and earn over $450 per month, your employer is required to contribute at least 9.5% of your income to your superannuation account. If you are under 18 but work for your employer for more than 30 hours per week, your employer may also be required to contribute to your superannuation account.  If you are unsure of your entitlements, it’s a good idea to get professional advice. Information regarding the superannuation guarantee is available at https://www.fairwork.gov.au/pay/tax-and-superannuation

Sole traders

Creative practitioners working as sole traders tend not to have a regular income, nor an employer for much of their career.

As a creative practitioner, contributing to your own superannuation could be an effective way to ensure you have funds for your retirement. Depending on what type of contribution you make, you may be able to claim a tax deduction on your contributions. However, there are limits on the amount of contributions you can make to your superannuation each financial year.  If you contribute more than the contribution caps, there may be tax consequences. Information about the contributions that may be made to a superannuation account can be accessed by clicking the link –https://www.ato.gov.au/Individuals/Super/Growing-your-super/ 

If you’re on a low income, or live with a spouse earning low or no income, there are ways to enhance both of your superannuation savings. The Government may even make a co-contribution to your fund, if you meet certain requirements

Read more about being self-employed as a sole trader and superannuation here:

https://www.ato.gov.au/Business/Super-for-employers/Working-out-if-you-have-to-pay-super/The-self-employed/

Whether you’re employed, or a sole trader, you may want to read about other ways to boost your superannuation.

https://www.moneysmart.gov.au/superannuation-and-retirement/how-super-works/super-contributions.

How much super will I need?

Determining how much superannuation you might need depends on the kind of life you want in retirement. If you are seeking a ‘comfortable’ retirement which might include domestic and occasional overseas travel, home renovations, and regular leisure activities, then you will likely need more superannuation to fund your lifestyle. But before all of that, it may be important to consider the kinds of medical expenses, housing and utility costs you expect to incur throughout your retirement. If you’re not sure how much superannuation you might need when you retire, it’s important to obtain financial advice.

There are several guides online that can help you determine how much superannuation you might need:

https://www.ato.gov.au/Individuals/Super/Growing-your-super/Adding-to-your-super/

https://www.statewide.com.au/resources/calculators/ https://www.moneysmart.gov.au/superannuation-and-retirement/how-super-works/super-contributions/how-much-is-enough

https://www.superannuation.asn.au/resources/retirement-standard

When can I access my superannuation?

The age when you can begin to access your superannuation depends on what year you were born, but its currently between 55-60 years old and you must meet a condition of release, eg: be permanently retired. You can access your super when you turn 65, without meeting another condition of release.  Information regarding when you are able to withdraw your super can be found here: https://www.ato.gov.au/Individuals/Super/Withdrawing-and-using-your-super/.

When you are able to access your superannuation, you should consider if you want to receive a regular pension payment, a lump sum, or a combination of both.

There are some circumstances that could allow you to access your superannuation before retirement. If you are considering applying for an early release of your superannuation, you should consider seeking financial advice.

For more information about accessing your super see the MoneySmart website:

https://www.moneysmart.gov.au/superannuation-and-retirement/how-super-works/getting-your-super

Superannuation health check

When you have retirement savings in a superannuation account, it’s a good idea to check in from time to time and make sure it’s on track to provide you with funds for the retirement you want. Statewide Super has a simple Super health check you can do online to review if your super is in good health and working for you.

Statewide Super Health Check

Finding your lost superannuation and consolidating your accounts

If you’ve had various jobs over the years, you might find that you have accumulated a few different superannuation accounts. You may even have superannuation you aren’t aware of. Locating all of your super and consolidating it into one account may allow you to keep track of your retirement savings more easily and possibly save money in fees and charges. However, it is important to consider the effects of combining your superannuation into one account and the impact that may have on your retirement savings.  You should also consider the impact of consolidating your superannuation and any insurance cover you may be entitled to and the fees and costs charged by each fund you have an account with.

These links will provide more information about the things you should consider before deciding to consolidate your superannuation accounts:

Find your superannuation:

https://www.ato.gov.au/Individuals/Super/Growing-your-super/Keeping-track-of-your-super/#Checkyoursuper

Consolidate your superannuation:

https://www.moneysmart.gov.au/superannuation-and-retirement/keeping-track-and-lost-super/consolidating-super-funds If you are not sure whether you should combine your super into one account, you should seek financial advice.

Guildhouse financial members are able to obtain one on one professional development support about many areas of their practice. Contact us for more information.

The information provided contains general advice which does not take into account your specific objectives, financial situation or needs. Before investing, you should consider the appropriateness of this general advice with regard to your personal circumstances. You may also wish to obtain independent financial advice.  This toolkit is not intended to be, and should not be construed in any way as, investment, legal, or personal advice. 

Statewide Super does not guarantee, warrant or make any representation as to the accuracy or completeness of the content of this document. Information provided on products, legislation and taxation matters is provided as an overview and is of a general nature only.  It does not take into account your specific objectives, financial situation or needs, and you should think carefully about the appropriateness of this general advice with regard to your personal circumstances.  We recommend you obtain independent financial advice from a suitably qualified expert on matters covered in this presentation and consider the applicable Product Disclosure Statement available at statewide.com.au or by calling 1300 65 18 65.

This toolkit has drawn resources from several websites including the Australian Taxation Office, the Australian Securities and Investment Commission the Association of Superannuation Funds of Australian and Statewide Super.

Statewide Super has a Super Hub at 211 Victoria Square where they regularly run information sessions about retirement planning, superannuation and investments. For more information visit https://www.statewide.com.au/. Statewide Super members can also meet to discuss superannuation and receive personalised advice about investment options, insurance cover and even contributing to your Statewide Super account, all at no additional cost. 

Statewide Superannuation Pty Ltd ABN 62 008 099 223 (AFSL 243171) Trustee and RSE Licensee of Statewide Superannuation Trust ABN 54 145 196 298 (“Statewide Super”). In deciding whether to acquire, or continue to hold, a Statewide Super product, please consider the applicable Product Disclosure Statement (PDS) available at statewide.com.au or by calling 1300 65 18 65.

Statewide Super holds an Australian Financial Services Licence (AFSL) that allows it to provide both general and personal financial advice. For further information and a copy of the applicable Financial Services Guide, visit www.statewide.com.au or call 1300 65 18 65.