Nearly all Australians will have to be involved with their own super, but it can be confusing at times. So we put together a superannuation FAQ page, below are the common questions you have been asking about superannuation.
Do You Have To Have Super?
If you are an employee, yes. It is illegal for an employer not to pay employees super. The rate is currently 9.5% of wages. If you are self-employed, you don't have to make super contributions to a super fund for yourself.
Can You Control Your Own Super?
Yes, you can set up a Self Managed Super Fund (SMSF). This means you can choose where your own super is invested. However the fees you will have to pay and the time it wil take to manage your own super fund might be too high to give an advantage over a non self managed super fund.
Can You Buy Your Own House With Your Super?
No. If you choose to set up a SMSF, you can control your investments, and can choose which property to purchase, but you cannot live in the property you purchase using your super funds. However, you can purchase a commercial property and use it for your own business, as long as you pay rent at the full market rate.
Your SMSF can also allow you to borrow to invest in property. As most people wouldn't have enough cash in their super fund to purchase a property outright, you can use what you have as a deposit to borrow more and invest in property. The repayments have to come out of your super fund, thus if the rent does not cover the repayments, your contributions will have to, if these two combined still fall short, you will have to make extra super contributions to cover the repayments.
If you would like to know more about SMSF's read our Self Managed Super Fund Guide.
Can You Make Extra Super Payments?
Yes! And it is encouraged by the Government! Any after-tax contributions you make will not usually be taxed in the super fund, unless you exceed your non-concessional contributions cap, which is $150,000 in 2013-2014.
Can I Still Receive Bonus Super From The Government?
Yes. If you earn less than $37,000 or less, the Government will contribute bonus super to you at an amount of 15% of the total amount you have already been paid by your employer. The amount the Government will contribute is capped at $500 per year.
If you earn less than $48,516 and make after-tax contributions you can also get up to $500 a year in Government co-contributions.
What Happens To My Super If I Die?
If you were to die before you can access your super, you can ensure your built up funds will go to your loved one, usually tax free.
There are some things you need to make sure you have setup to make sure the right people get the right amounts, to find out more, see our article on What Happens To My Super If I Die?.
If you have any other questions about Super, let us know on our MoneyBuddy Facebook Page.