| On return from vacation, young children in a | | | | established by employers for their employees. |
| school were asked to write down their | | | | · Self- Managed Superannuation Funds are |
| experiences. A bright girl started her essay like | | | | funds established for a small number of individuals |
| this: "Every year, we used to go and live with our | | | | (usually fewer than 5). |
| grandparents during the holidays. They used to | | | | · Public Sector Employees Funds are |
| live in a huge house, but Grandpa got retarded | | | | funds established by governments for their |
| and they moved to Florida and now they live in a | | | | employees. |
| house with many other retarded people..." | | | | Withdrawal of Funds |
| You and I have to plan our retirement more | | | | Contributions to Superannuation fund is taxed at |
| imaginatively if we do not want our grandchildren | | | | 15% which is lower than the rate of tax levied on |
| to write such essays! Through sensible spending, | | | | income. The Federal government has announced |
| saving and investing, one can look forward to a | | | | in their 2006/07 budget that from 1 July 2007, no |
| relaxed and fulfilling retired life. | | | | tax will be payable by Australians over the age of |
| The wise employee does not allow his money to | | | | 60 on a lump-sum withdrawal of their |
| lie in savings accounts in banks. He will invest it in | | | | superannuation fund. |
| superannuation funds, property, managed funds, | | | | Workers may withdraw superannuation savings in |
| stocks, bonds and insurance. His lifestyle will | | | | a lump sum or as an annuity the latter being least |
| determine how much he would spend and how | | | | preferred by retirees. There are no governmental |
| much he would have to save to maintain the | | | | restrictions on the amount of withdrawal by |
| lifestyle after retirement. | | | | individuals and, therefore, subscribers who reach |
| The working years are years of wealth creation | | | | the preservation age (currently 55) may withdraw |
| in addition to meeting one's lifestyle expenses like | | | | the entire balance in their accounts. |
| education of children, house, travel, festivals, | | | | Tips for Investors in Retirement Funds |
| holidays, gifts, medical expenses and so on. In | | | | Today Australia is called as a 'shareholder society' |
| retired life, man (or woman) has to manage his | | | | thanks to compulsory superannuation in |
| accumulated wealth or savings in such a way that | | | | combination with buoyant economic growth. Most |
| it generates sufficient income for his life and | | | | workers have become indirect investors in the |
| provides adequately for his dependents in the | | | | stock market. Consequently, many Australians |
| event of his demise. | | | | have started evincing a lively interest in the |
| Joining a Superannuation fund | | | | investment market. |
| · You can join a fund when you take up | | | | The intelligent investor may consider the following |
| a job as your employer is expected to pay | | | | factors while planning/investingtheir retirement |
| contributions into a fund on your behalf. | | | | funds - |
| · The self-employed can decide for | | | | · While Superannuation and self-managed |
| themselves if they want to join and contribute to | | | | superannuation funds are preferred options in |
| a fund. | | | | planning for retirement, fixed interest mortgage |
| · Even those who are unemployed at | | | | funds and cash investments are also good |
| present or never have been employed before | | | | alternatives. |
| can still join and contribute to a fund up to | | | | · Choose a fund which has a favourable |
| sixty-five years of age. | | | | fee structure |
| Choice of superannuation funds | | | | · Self-managed funds have flexibility and |
| After introduction of compulsory contributions | | | | lower operating cost but demand time and skill to |
| during the past decade, Australian workers are | | | | manage them. Otherwise, you have to seek |
| estimated to own $913 billion in superannuation | | | | advice from finance professionals. |
| assets. The per capita money invested in | | | | · Managed funds like mortgage and cash |
| managed funds is more than than in any other | | | | funds are as good as superannuation funds if you |
| economy. | | | | choose schemes which are secure and pose little |
| Australian employees have now been empowered | | | | risk to your money. The managers invest your |
| to choose the fund into which their employer will | | | | money across a range of portfolios thus reducing |
| pay their future superannuation guarantee | | | | the risks for the investor. |
| contributions (around 9% of the earnings) . They | | | | · You can also reinvest your super funds |
| can exercise their option in the following ways: | | | | in managed funds and live in style off the interest |
| · change funds when their current fund is | | | | income. |
| not available with a new employer; | | | | Happy Retirement |
| · consolidate superannuation accounts to | | | | In a farewell party, a corporate boss who was |
| cut costs and paperwork; | | | | retiring asked his colleagues to tell him frankly |
| · select a lower-fee and/or better service | | | | how they viewed his retirement. Promptly came a |
| superannuation fund; | | | | stage whisper from the back of the crowd," The |
| · change over to a superannuation fund | | | | best news in twenty years!" |
| that shows better performance. | | | | Jokes apart, it is certainly the best news for us |
| There are six main types of superannuation funds: | | | | when we call it a day and hang up our boots - no |
| · Industry Funds are multiemployer funds | | | | more deadlines, targets, late hours, nagging |
| run by employer associations and unions. | | | | bosses and tensions. We are now free to pursue |
| · Wholesale Master Trusts are | | | | all that we had wanted to but had not had the |
| multiemployer funds run by financial institutions for | | | | time to do. |
| groups of employees. These are also classified as | | | | How we save and invest during our productive |
| Retail funds by Australian Prudential Regulation | | | | years is going to crucially affect our contentment, |
| Authority. | | | | sense of security and happiness in the sunset |
| · Retail Master Trusts/Wrap platforms | | | | years of our lives. Truly, these years open up |
| are funds run by financial institutions for individuals. | | | | another era of self-growth and discoveries in |
| · Employer Stand-alone Funds are funds | | | | dimensions we least suspected we had in us. |