5 Incredible Superannuation Benefits You May Not Know About

How Superannuation Benefits Your Retirement Goals

In this article, you will discover 5 incredible superannuation benefits you probably haven’t heard of, that may encourage you to start building yours!

The Superannuation Guarantee Bill was introduced in 1992 to help Australians to prepare themselves adequately for retirement. This bill also had the intention of alleviating the cost imposed on the State, who had to previously carry the burden of retired individuals almost in full, through Age Pension. Even though there have been several reforms made to the original bill, the purpose remains the same: help Australians save for retirement.

1. Tax-Free Retirement Income

superannuation benefits

One of the most appealing superannuation benefits is that qualified candidates have the possibility of withdrawing their retirement funds without having to pay any tax on them, either through a lump-sum payment or through a continuous stream of pension payments.

For individuals over 60, all the withdrawals made on their superannuation fund are usually tax-free. Imagine how much money you will be saving if you have $1,000,000 on your super and the usual income tax rate ranges from 15 to 30%. That’s between $150,000 and $300,000 in savings and that’s definitely one of the most incredible superannuation benefits.

2. Your Employer Adds a Cut

Under Australian laws, employers are obligated to contribute 9.5% of the employee’s gross monthly payment to their superannuation funds. This is an added benefit of setting up a super, as it allows you to receive money from your job that you will not otherwise receive if you had no super. For example, A 9.5% contribution to a salary of $40,000 per year over 10 years (without considering any earnings produced on them) add up to $38,000 in funds for your retirement.

3. Bankruptcy-protected Funds

In the event that you fall into bankruptcy, superannuation funds are protected from your creditors and, therefore, they cannot go after them to settle your due financial commitments. Even though this is the case in most instances, you should be aware that there are three scenarios in which your super’s funds may not be granted with this kind of protection, these are:

  • If the funds were held in a non-authorized institution or fund.
  • If the funds were withdrawn from the super’s accounts. In this case, the funds may be used to settle the claims.
  • If the funds were transferred to the superannuation fund immediately before filing for bankruptcy.

4. Potentially Cheaper Insurance

Most superannuation funds, given the fact that they have a considerable number of beneficiaries, negotiate collective insurance policies that offer substantially lower premiums to super account holders. This may become a very attractive superannuation benefit as it will give you access to a lower premium compared to those offered to private individuals.

5. Access to Certain Premium Investment Opportunities

Through a superannuation fund or a Self-Managed Investment Fund an individual enjoys access to a wider range of investment opportunities. These can include investment opportunities that require considerable funding, such as real estate investments or certain investment funds. These opportunities commonly offer very attractive returns, yet they are not accessible for individual investors as they require minimum entry amounts that often exceed their available capital.

If you want to learn more about the benefits of superannuation funds, at Bloomwealth we can help you in designing a financial strategy that helps you reach your retirement goals. Contact us today and let’s get you all set up and ready to move towards a bright financial future.