Mythbusting: I can only use my super when I retire

While the primary purpose of your super account is to save money for retirement, it’s a myth that retirement is the only way super can help you. Find out about some benefits you can start seeing from your super before you hit retirement age.

You can save for the purchase of your first home through your super thanks to the First Home Super Saver Scheme (FHSSS).

Under the scheme, you need to be making voluntary contributions to your super. These are contributions outside of the mandatory Superannuation Guarantee paid by employers. You can contribute up to $15,000 a year and a maximum of $50,000 towards the scheme, and withdraw up to $50,000 from the voluntary contributions plus the associated earnings to help you fund a deposit on your first home.

Why save for your home in your super instead of a regular savings account? That’s because it could offer some tax savings. Contributions to your super are taxed at 15%, which is generally less than your marginal income tax rate, meaning you may be able to grow your savings faster by using your super account.

Research tells us that the three main reasons people fail to seek financial advice are:

• A belief that they don’t have enough money or earn enough

• The cost of advice

• Simply not getting around to it

Our smartCoach team are here to help and take all those issues away. If you are a smartMonday member, we can provide you with financial advice about your super as part of your membership – at no extra cost. Ask us about contributing to your account or your investments or insurance, regardless of your age, stage of life or income. It’s as simple as reaching out.

Talk to a smartCoach today on 1300 262 241, or email smartcoach@smartmonday.com.au.

The government knows that with an aging population, the more retirees who are able to fund their own retirement through superannuation the less people there are relying on the Age Pension and a better balance sheet there will be for Australia. So, they give us better tax rates for the money we put in super. 

The tax rate on your before-tax contributions is only 15%. These contributions are limited to $30,000 per financial year and include employer Super Guarantee payments, any fees and/or insurance premiums paid by your employer and any salary sacrifice contributions. As a result, contributing to super can help you save on the total amount of tax you pay.

If you are aged 60 or over, then using a Transition to Retirement (TTR) account can also be a way to access tax-free income.

Using a TTR account allows you to continue contributing to your super while you are working and begin accessing your existing balance. This can be a way to take advantage of the low 15% tax rate that applies to super. It's worth investigating if you are near or over 60.

Most super funds offer some level of insurance protection, and the premiums are paid from your super rather than your bank account.

Often, when you are younger, insurance cover can protect you and your family or loved ones if something happens to you that impacts your ability to work and can also provide a safety net for family and loved ones in the event of your death. This can be seen as an asset, because the payment on any insurance you receive as part of your super is likely to be higher than your super balance when you are starting out. As you get older, and your super typically increases in value, the value of your insurance may be able to decline.

smartMonday provides you with access to:

• Life insurance, paid in the event of your death, with cover available until age 70

• Total and Permanent Disablement insurance which provides you with a lump sum payment if you become permanently unwell or incapacitated

• Income Protection insurance, which will provide you with a monthly income if you are unable to work for a period of time

There are many commonly held beliefs that could affect how you treat your super.  Register for our webinar on 2 April at 12.30 pm (AEDT), where we’ll be busting lots more myths to help set you up for super success.