Superannuation (Part 1)
Is it time to start thinking about your 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.
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 the website of the Fair Work Ombudsman.
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 here.
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.
Whether you’re employed, or a sole trader, you may want to read about other ways to boost your superannuation.
Photograph: Rosina Possingham
Image: Jess Dare at work in her studio. Photograph: Jonathan VDK
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.
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.
For more information about superannuation see the Australian Taxation Office website.
Guildhouse financial members are able to obtain one on one professional development support about many areas of their practice. Read more about Guildhouse membership here.
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