Introduction to Australian Superannuation

Australians, in general, constitute some of the worst savers in the world. Current estimates suggest that, on average, Australians save just 4% of their income. This is less than half of the 11% estimate for Australians in the late 1970s.

In the past, pensions from taxpayers were used to provide pensions for senior citizens upon their retirement. However, because of the increased life expectancy of Australians coupled with the decrease in the average number of children per household, the use of pensions, if persisted with, will put a significant strain on the Federal Budget.

As a result, the concept of superannuation was introduced whereby employers are obligated via the superannuation guarantee to contribute at least 9% of an employee's wage to a superannuation fund which must be preserved until the employee has reached retirement before it can be accessed.

The advantage of making contributions to superannuation are that it introduces a form of forced savings for Australians into a fund which will hopefully invest the money into the appropriate assets for increasing its value over the long term.

As an added incentive, contributions to superannuation are only taxed at a marginal rate of just 15%. For most income earners in Australia, this will be more attractive than the usually high tax rate that they would be subjected to if their money was not put into superannuation.

A disadvantage of the superannuation scheme is that many Australians, particularly those who change employers regularly, are likely to have various small amounts of money in a number of separate superannuation funds.

This, in turn, can lead to a decrease in earnings as each fund will introduce any number of fees for maintaining the account. More significantly, a member account in a superannuation fund can possibly be forgotten in time and become unclaimed.

It is estimated that there is currently more than $7.2 billion of unclaimed and lost superannuation. This works out to about one in every three Australians who have money in superannuation and don't know about it.

As such, it is imperative that Australians take a proactive approach to superannuation by making sure they are always aware of which funds their superannuation contributions are being made to and by rolling over these amounts where practical into a consolidated fund each time they change jobs.

By doing so, one can avoid the difficulties involved in having to track down any possible lost money belonging to them after years of neglecting to pay attention to superannuation during employment.

Jonathan Bailey is a columnist for Unclaimed Superannuation, a website containing information on superannuation and how to track down lost and unclaimed super.

---

Estate Planning Basics

You have probably accomplished a great deal with your life.... Read More

University: A Course in Personal Finance

Recent findings from the Educational Policy Institute indicated that the... Read More

Retirement Income Needs---Less Than You Think?

It is widely written that you need 75% of your... Read More

Budgeting -- The Critical Flaw That Causes Most Budgets to Fail

Budgeting. It's a word we're all familiar with. Everyone knows... Read More

How to Obtain a Non ChexSystems Bank Account Without Being Scammed

Predatory lending exists in the mortgage industry. It's typically when... Read More

Improve Your Professional Image Using Address Labels

One of the simplest ways to improve your professional image... Read More

Bankruptcy Chapters Explained

Chapter 7The potential chapter 7 debtor should understand that a... Read More

Vesting and Your 401(k)

Do you have a 401(k) retirement account? Are you vested... Read More

The Origins of Check Writing

People haven't always written checks to buy goods and services.... Read More

Take Control and Master Your Kitchen

Those who keep a watchful eye on where their money... Read More

Make or Break Your Retirement!

The Prudential has dubbed those who refuse to leave home... Read More

College Expenses: Seven Ways to Save on an Education

Many people graduate from college owing thousands of dollars in... Read More

Save Money on Gas

Gas prices have soared to unimaginable heights of late. Since... Read More

10 Steps to Take if You Are a Victim of Identity Theft

There have been an estimated 9.9 million victims on America... Read More

Bankruptcy Laws Get Tougher - More Expensive

If you've been thinking about filing for bankruptcy, your best... Read More

Tips To Save Money At The Supermarket

Are you interested in saving money off your grocery bills?... Read More

How To Get Ahead On A Low Income

Do you struggle from week to week trying to make... Read More

Reporting Identity Theft

Would you know what to do if you suspect that... Read More

Financing Collectibles for Fun and Profit

With the advent of the internet and especially auction services... Read More

First Checking Account ? When is it Time?

We all know that money doesn't grow on trees, but... Read More

Family Money Management: The Importance of Agreement

Are you having problems with debt? Are you afraid to... Read More

Ways to Save Energy and Slash Electricity Bills

1. Lighting & Light Bulbs Install low energy light... Read More

Saving Money - The Magic 20 Percent

Saving money is not easy and is made more difficult... Read More

Grocery Savings - Your Kitchen is a Goldmine!

Your food budget is the most flexible area of your... Read More

If All Things Are Possible, Why Cant I Balance My Checkbook?

For me, the most terrible time of each month is... Read More

How Check 21 Affects You

The Check 21 Law is the new federal law for... Read More

10 Quick And Cheap Ways To Cut Your Heating Bill

When you received an energy (heating) bill last winter, were... Read More

Roth IRA Contributions - IRS Rules

Confused about whether you can contribute to a Roth IRA?... Read More

Planning Your Financial Future

Millions of people give a lot of thought to financial... Read More

Do You Really Need the Power of Money Management Software?

I have been a loyal user of Quicken(R) for more... Read More

Dramatically Improve Your Stock Trading Success

Get Access to Realistic profitable strategies & discover the mindset... Read More

Money Matters - Really!

One of the biggest challenges facing black RELATIONSHIPS today are... Read More

Can You Afford Not To Look After Your Personal Finances?

Investing is a subject a lot of people don't want... Read More