When it comes to retirement planning, there are a lot of terms and concepts that can be confusing. In this series, we’ll help demystify some of the key terms you need to know.
Rollover: This is when you move move your superannuation from one fund to another. This could be to cosolidate your super into the one account, or once you reach your preservation age, you choose to rollover your super into an account-based pension.
Salary sacrifice: Salary sacrificing is an arrangement you can make with your employer to have them pay some of your before-tax salary into your super account instead of into your bank account. This can be a great way to boost your retirement savings, as any money that goes into your super is generally taxed at a lower rate than your regular income.
Superannuation: What is superannuation? Basically a long-term savings plan that your employer makes contributions to on your behalf. The money in your super account can be used to provide an income in retirement. It is a vital part of ensuring your financial security in retirement.
Superannuation Guarantee: This is the minimum amount of super that your employer must contribute on your behalf. Currently, the Superannuation Guarantee is set at 10.5% of your salary. However, most people choose to contribute more than this into their super fund to ensure a comfortable retirement.
Further Reading
https://moneysmart.gov.au/glossary
What Next?
Don’t be intimidated by the financial jargon. Taking the time to understand the jargon along with using the eairwoman app will give you greater insight into your overall financial health, and ultimately help you achieve your retirement goals.
