Your super is typically considered a long-term investment, specifically designed to help you save for retirement.
During your working life, your employer will make regular contributions to your super account as required by the Superannuation Guarantee (SG). You can also add extra money to your super; this is commonly referred to as ‘making super contributions’.
It's worth taking an active interest in your super savings during your working years. It's your money and your super's investment performance over time will impact how much you eventually have in retirement.
The money in your super is invested across a variety of different investment types.
These investment types are a key factor in determining rates of returns on your super. Defensive investments, like cash and fixed interest, offer lower risk with lower returns. Growth investments, such as shares and property, are typically considered higher- risk investments that can carry potentially higher returns.
Generally, when you’re younger, you may be prepared to invest in higher-risk growth investments as you have time to recover from potential losses along the way.
On the flip side, if you’re heading towards retirement (or are retired), you may be less willing to invest in higher risk assets. Instead, the lower-risk, defensive investments may be more appropriate, as they help cushion your capital from investment volatility.
Things you should know
This information has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation, and needs.
Superannuation is a long-term investment. Generally, contributions to a superannuation fund are preserved. The government has placed restrictions on when you can access your preserved benefits. In general, benefits will not be able to be paid until a member is age 65, or has permanently retired and is above his/ her preservation age (i.e. 55 years up to 60 years depending on when the member was born).
The Government has set caps on the amount of money you can add to superannuation each year on a concessionally taxed basis. Contributions that exceed your contributions caps may have additional tax applied to them. The contributions caps change from time to time. Up to date information is available on the ATO website at ato.gov.au.
Before requesting a rollover, you should consider where your future employer contributions will be paid (if your employer contributions are currently being paid to another fund) and check with your other fund(s) to determine whether there are any exit or withdrawal fees for moving your benefit, or other loss of benefits (e.g. insurance cover), noting that you may not receive the same type or level of benefits after the rollover. You may not be covered for injuries or illnesses that have arisen since you took out previous insurance, and you may lose loyalty benefits.