What is superannuation?

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What is super?

Have you ever saved up to buy something? Maybe you are putting money aside at the moment to buy a car or something that is important to you. Superannuation, often called super, is money you set aside during your working life to provide an income to live on when you retire from work. Most people start to contribute to super when they begin work and keep contributing until they retire. The money is invested in one or more super funds of your choice.

You must leave your super in your fund until you either reach a minimum age or meet strict requirements set by the government. Your super is invested in assets such as bank accounts, property or shares, which earn an income. This income is reinvested in your super fund and then earns more income. This process, where you can generate earnings from previous earnings, is called compounding and greatly increases your final super payout.

The government encourages super savings by offering tax concessions that are not available with other forms of saving. In addition, no tax is charged for most people when they retire at 60 or older and take their super as a regular pension or a lump sum.

  • Fact 21

    As overseas travel became more common in the 1960s, the ATO stopped issuing tax clearance certificates (which had previously reminded Australians planning on travel that they must ensure they had paid all tax owed prior to leaving the country).

Substantiation

Evidence of allowable deductions. Taxpayers must keep documents and records that can be used to prove they actually incurred the expenses they have claimed. These records must generally be kept for five years after they are claimed on a tax return.

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