Maximising the potential of your superannuation fund
Tuesday July 1, 2008
One of the unfortunate issues of investing in a superannuation fund is that many people do not do so when it will give the greatest benefit. The earlier in your career that you add extra money into your superannuation fund, the more money it will have made by the time you retire. Obviously there are fair enough justifications for not adding to your superannuation fund when younger, such as the need to save for a home loan or other needs, but it can be quite simple to find money you won't miss to contribute money to retirement long before it is needed.
Many younger people will find that they receive a refund n their tax return due to not having a high enough income. While some people spend in the hopes of a high tax return, most are wise enough not to count their chickens before they hatch. If you receive an unexpectedly large tax refund, contributing it to your superannuation fund can be an excellent investment. A few hundred dollars may not be much of an investment in other areas, but 30 or 40 years in a superannuation fund should help it to pay off.
Another benefit of contributing to a superannuation fund while on a lower income level is that the amount you will be rewarded for is higher. There are limitations on the bonus money that the government will add to voluntary superannuation fund contribution. This is largely due to the fact that higher income earners are likely to have enough retirement funds merely using the 9% contribution their employer must make. Maximising your superannuation fund when starting your career can mean less effort is needed to increase it when retirement approaches.
Please visit our sponsors if you are interested in finding out more about the management of a superannuation fund.
