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As a new resident of Australia, I love, love, love the idea of superannuation. My employer contributes 9% (IIRC) to my retirement. I never see it, so I never mi

As a new resident of Australia, I love, love, love the idea of superannuation. My employer contributes 9% (IIRC) to my retirement. I never see it, so I never miss it or spend it. I can also choose to make extra contributions if I like, which I most likely will once moving expenses are paid. It's a 401k, but better.

ryanackley 15y ago
If you don't plan on living in Australia permanently, be aware that your effective tax rate on contributions to your superannuation is 50%. You pay a flat rate of 15% on your contributions like everyone else. When you leave Australia permanently, they take out 35% before giving you back your money. http://www.ato.gov.au/superfunds/content.aspx?doc=/content/32119.htm&pc=001/149/021/001/001&mnu=0&mfp=&st=&cy= http://www.ato.gov.au/superfunds/content.aspx?doc=/content/3...
brc 15y ago
Well, it's good, but don't for a minute think that your employer is contributing to your retirement. You're contributing to your retirement by deducting 9% of your wages into a retirement fund. In most salaried positions, they drop the charade of 'employer contributed super' and talk about your 'total package' which includes your super payments. I'm not arguing against the merits of forced investment, but you shouldn't believe your employer is paying it for you. You are paying it.
- nl 15y ago
  Yes and no. It is different to salary, because it is taxed differently, and when the superannuation rate increased (which happens occasionally) you never see a reduction in your take-home pay. But it does reduce the amount they can afford to give you as your take-home pay. Actually, the really interesting discussion is about superannuation-as-forced-savings vs a sovereign-wealth-fund. They aren't really equivalent, but they have some similar outcomes (eg a large amount of capital available for investment). I've gone back on forth on if we should have a sovereign wealth fund - there are good arguments both ways.
vacri 15y ago
The smartest thing they did was make it payable from employers separate to your wage - that way you don't get the "gummint taking my wage, bastards!" crap. It's an extra cost to employers, but they don't tend to storm the newspapers with knee-jerk reactions and fiery torches...

ryanackley 15y ago

If you don't plan on living in Australia permanently, be aware that your effective tax rate on contributions to your superannuation is 50%. You pay a flat rate of 15% on your contributions like everyone else. When you leave Australia permanently, they take out 35% before giving you back your money. http://www.ato.gov.au/superfunds/content.aspx?doc=/content/32119.htm&pc=001/149/021/001/001&mnu=0&mfp=&st=&cy= http://www.ato.gov.au/superfunds/content.aspx?doc=/content/3...

brc 15y ago

Well, it's good, but don't for a minute think that your employer is contributing to your retirement. You're contributing to your retirement by deducting 9% of your wages into a retirement fund. In most salaried positions, they drop the charade of 'employer contributed super' and talk about your 'total package' which includes your super payments. I'm not arguing against the merits of forced investment, but you shouldn't believe your employer is paying it for you. You are paying it.

nl 15y ago
Yes and no. It is different to salary, because it is taxed differently, and when the superannuation rate increased (which happens occasionally) you never see a reduction in your take-home pay. But it does reduce the amount they can afford to give you as your take-home pay. Actually, the really interesting discussion is about superannuation-as-forced-savings vs a sovereign-wealth-fund. They aren't really equivalent, but they have some similar outcomes (eg a large amount of capital available for investment). I've gone back on forth on if we should have a sovereign wealth fund - there are good arguments both ways.

vacri 15y ago

The smartest thing they did was make it payable from employers separate to your wage - that way you don't get the "gummint taking my wage, bastards!" crap. It's an extra cost to employers, but they don't tend to storm the newspapers with knee-jerk reactions and fiery torches...