Superannuation. It's a concept that nearly all of us understand as important, but sometimes struggle to grasp how to take full advantage.
For millennials, superannuation will prove critical. With Australia considering the merits of raising the retirement age, the amount that millennials save throughout their working life will need to suffice for a lot longer – even if the concept seems a little foreign now.
So, if this sounds familiar, what do you need to know about superannuation to ensure your financial security as a contractor?
Securing superannuation as a millennial
According to recent statistics from Roy Morgan, Australian millennials have more than doubled their share of superannuation funds over the past 10 years. In September 2007, millennials had around 6.4 per cent share, but now enjoy a 14.6 per cent share, calculating to about $226 million.
At the same time, baby boomers have started to drop away as many approach retirement age and begin to draw funds. Yet millennials face ongoing issues in maximising their superannuation funds, as Roy Morgan Research Industry Communications Director Norman Morris explained:
"It is a major challenge for superannuation funds to engage the younger generations in a long-term issue such as superannuation, when they are most likely to have shorter term priorities such as housing affordability and lifestyle," he said.
"Concerns relating to rule changes to superannuation that are likely to occur over the many years involved and difficulties in accessing funds, are also likely to be contributing to a general lack of engagement by the young in superannuation."
Contractor superannuation in Australia
For millennial contractors, superannuation is a vital topic. As the nature of your work can differ between months or even weeks, having a well-structured and productive superannuation fund should be at the top of your priority list.
Assuming that you'll also own your own home, the Australian Securities & Investments Commission states that a couple should be aiming for around $640,000 (or $545,000 for a single person) by the time they reach retirement. This said, as the price of living continues to increase in Australia, it might be the case that these figures end up higher as the years progress.
This is certainly where Oncore Wealth Solutions can make a difference for your future. In order to ensure you have enough savings for retirement, you need to be in the best super fund possible – one that meets your personal financial situation and will be productive over time.
Here's how Oncore Wealth Solutions can support your superannuation ambitions:
1) How much to contribute
While your employer is required by law to pay 9.5 per cent of your salary into a super fund, contractors have the opportunity to make additional top-ups of their own. Keeping in mind contribution caps, the team at Oncore Wealth Solutions will help to decide how much you can afford.
2) What insurance is available
Through Oncore Wealth Solutions it's possible to connect your superannuation with various types of insurance including life cover, total and permanent disability cover and income protection insurance. These rates are affordable and packaged in a way to help you and your family.
3) How to consolidate other superannuation funds
Did you know that there are billions of dollars of unclaimed super funds across Australia? If fact, you could be owed a portion of these unclaimed funds. Working with Oncore Wealth Solutions ensures you can consolidate any outstanding funds into your current fund and maximise return over time.
For millennial contractors, now is the time to start and be confident around your superannuation fund. If you would like assistance in how to maximise your returns, get in touch with the expert team at Oncore Services today.