Self managed super is an investment vehicle that allows Australians to save for their retirement in a tax effective way.
Employers are required to pay a minimum of 9% of each employee’s income into a superannuation fund of the employee’s choice, and the funds are then invested to maximise returns for the worker’s retirement.
The monies held in a superannuation fund are not able to be accessed until a condition of release has been met. For most Australians the condition of release will be triggered upon their retirement, however there are other conditions such as financial hardship.
Many Australians will not have sufficient self managed super monies available to fund a comfortable retirement. For this reason, you are permitted to make additional contributions to your super over and above the 9% contributed by their employer.
Whilst the Commonwealth Government promotes additional super contributions through schemes such as the Super Co-contribution, it also places limits on the maximum contributions allowed each year to ensure that wealthy fund holders are not exploiting the tax friendly nature of superannuation.