With an approximate $2.8 trillion dollars, Australia’s superannuation retirement saving pool is getting enormous. Considered as a model for other countries, Australia’s superannuation is hailed as one of the most systematic and efficient retirement schemes.
But, when some new concept becomes popular and big, it often gets shrouded by apprehensions, doubts and negative publicity. This eventually gives rise to myths which dilutes the real essence of the whole idea.
That’s exactly what has happened with superannuation. There are a lot of misconceptions about super funds which has apparently created aversions among Aussies and impacting their retirement savings.
Here, we have listed down some of the common myths and misconceptions, along with debunking them to present a clear picture:
Superannuation Funds Has No Effect on Your Retirement Outcomes
An increasingly large number of Australians between the ages of 65 – 69 depend on the super as their primary source of income during their retirement. With the dependence on superannuation funds escalating and super delivering more retirement incomes, there’s been a steep decline in the number of people relying on old age pensions. Subsequently, the retirement outcomes are improving as superannuation funds rose from $407,000 to $470,000.
You Can’t Use Your Super Funds Till You Retire
This is not entirely true! The thing is that super funds are your money, very much like the one you earn as a salaried employee or a business owner. Super funds is a medium to manage and save your money up until you reach the age of retirement. The fact is that you have complete control over it even before you retire. So, in case you are not satisfied with your service provider, you can always switch to a better one.
It’s Only for People who are Above 50
You don’t need to be above 50 to start working on superannuation. Most Aussies enjoy long lives and better health. This means you require additional money if you want to live comfortably and sustain a moderately decent lifestyle post retirement. You might even have to top up the Super to attain complete financial independence throughout your working years. Early start will give you an advantage!
Superannuation Doesn’t Work Well to Get People Off Age Pension
Over the years, just a small number of people are actually claiming the aged pension benefits. This essentially indicates that there’s less need for this as a large proportion of people have reasonably good superannuation balances that work well past the retirement age. According to an estimate, since 1997 the number of Aussies above the age of 65 on aged pension fell from 79% to 70%. The trend also shows that it’s expected to drop below 60% in the coming years.
If you have any doubts about superannuation, you can get in touch with experts from SMART Financial Advisory. We are one of the leading financial advisors and have in-depth knowledge about the nuances of superannuation.