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The maximum you will be charged is a 20% Establishment Fee and a 4% Monthly Fee. Under the current legislation lenders do not charge an annual monthly interest rate for our Small Amount Credit Contracts. You may know this as Annual Percentage Rate or APR(%). Click here to see a worked example.

The Annual Percentage Rate for Secured Medium Loans is 48%. Comparison Rate is 67.41% p.a. This comparison rate is based on a Medium Amount Credit Contract for an amount of $2,500 over 2 years and a $400 establishment fee. Fees and charges are payable. Click here to see a worked example.

The Interest Rate for Secured Large Amount Loans is 21.24%. Maximum Comparison Rate is 48% p.a. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Click here to see a worked example.

Superannuation and Retirement: Find out how to live your best life

That feeling of bliss when payday is upon us. Ah, it’s a beautiful feeling. When your bank account chokes back into life and you are free to spend a few extra dollars on a fancy coffee. The illusion, however, is somewhat shattered when we glace over our payslip and notice tax contributions. Then, there’s superannuation. At the bottom of your payslip, you may have noticed a small sum of money and think “where has that money gone?” Well, it’s going into hibernation for your future!

Whether the future is far away or frighteningly close, it’s important to understand superannuation and how it works. So, let’s dive into superannuation and find out how it’ll really help your future.

Close up: Superannuation

What is superannuation?

The most befitting (and cutest) analogy to explain why we have super and how it works is by looking at bears. Over the span of autumn, summer and spring bears gather supplies and food for the winter hibernation, where they enjoy a nice dose of sleep and relaxation. Sound familiar? Superannuation is essentially us gathering food for the winter (retirement).

The winter of our lives (many would call the golden years), is a time to relax after 40 years of hard work. For rejuvenation and epic holiday naps. However, for all these perks, much like the bears, we do need a hefty nest egg of moolah to equal a stress-free hibernation.

So, taking bears out the picture, superannuation is essentially an effective way to save for your retirement. It’s a pool of money you cannot dive into until you’ve hit that sweet retirement age. Lucky for us Australians, our employers are legally required to contribute to our super. We can also make are our contributions to our little nest egg if you’re feeling generous towards your future self.

How does superannuation work?

Essentially your employer contributes to your superannuation every paycheck. Legally your employer must pay superannuation as part of your salary. The laws guarantee that your employer will contribute 9.5% of your earnings into your superannuation. If you’re a low-income earner (if you earn less than $37,000), then the government will also contribute an extra 15% of your income per year.

How to contribute to your superannuation

Of course, your employer’s contributions are the minimum requirement for superannuation. Don’t be afraid to chuck a couple of bucks in your fund for your future self. After all, getting older doesn’t mean you won’t want to treat yourself! Here are a few ways you can personally contribute to your superannuation:

  • Salary sacrificing: If you wish to salary sacrifice for superannuation, then your employer will direct some of your pre-tax income into super. From one loanpal to another doing this will also save you tax come tax return time!
  • Personal contributions from your income: You can also ask your employer to contribute a portion of your post-tax income into your superannuation
  • Straight from the bank: If you love to save then superannuation is the ultimate prize. If you feel like your savings account is looking healthy, then why not transfer some of the future savings?

What’s the role of your employment in super?

As mentioned above, your employer is required to contribute The Superannuation Rate Guarantee (9.5% of your income) to superannuation. Precisely when your super is paid depends on the employer. They are required to at least make contributions quarterly. However, they may make the contributions every pay. You must be paid superannuation no matter what contract you have. Whether you’re working as a casual, part-time, or full-time employee, or a contractor, you are entitled to super. Even temporary residents are entitled to superannuation payments in Australia.




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Self-employment and superannuation

If you’re self-employed you have no legal requirement to pay yourself super. However, it’s obviously essential for your retirement. If you need some motivation to contribute to your future self, then, good news, because self-employed superannuation contributions are tax deductible!

What to look for in a good super fund?

Now, we know why we need superannuation and how it works, however, much like bears, we have many caves to choose from when it comes to storing food. For bears, they know exactly what to look for when they choose a cave. It should feel safe for the bears and the food. Same goes for us humans for superannuation. You want a fund that keeps your future money safe and protects your current finances. A trope many Australians conform to when choosing a superannuation fund is paying too much in fees. Apart from low fees, there are plenty of other good things to look for in a superfund:

Things to compare when searching for a superfund

  • Fees: the lower fees the better. You don’t want to waste too much retirement holiday moolah on storage fees. Even the slightest difference in fees can eat into your grey-hair-wandering funds
  • Extra benefits: For certain superfunds, your employer may volunteer more than 9.5% to contribute to your superannuation
  • Performance: Select a fund that has seen regular returns in the last 5 years. Look for solid consistency, not necessarily the best performer from the previous year
  • Insurance: Some people opt for insurance with their superannuation. Some super funds offer life insurance, total & permanent disability insurance (TPD) and income protection insurance. If you’re interested in taking out insurance with your superannuation fund, then perhaps consider a fund that offers cover that works for you
  • Service: Do they offer everything you’re looking for in your super fund? Your superannuation is your money, so you need to find a fund that works for your needs.

Loanpal tip: To help guide your senses towards the right superannuation fund, devise a checklist of all the things you are looking for in your super fund.

When it comes to searching for the right superannuation fund there are many options to explore. Like most things, the internet has made superfund searching easy. There are several sites that offer tools to compare super funds, such as Canstar.

Industry super funds

When mulling over superannuation funds, also consider an Industry Superfund. We’ve all seen the ads, encouraging us to be part of a superfund that understands your industry. Industry Super Funds is the largest collections of funds in Australia, with 5 million workers already opting for one of their funds. In some cases, your employer may already have a default super fund in mind. If that’s the case, check if it’s relevant to your industry. Industry relevant superannuation funds are a great option if you’re looking for a fund catered to your needs.

Here are a few major funds in the Industry Super Funds group that cater to a variety of industries:

  • Australian Super: Largest superfund in Australia, works for a wide variety of industries
  • Cbus: Perfect for workers in building construction and related industries
  • Hesta: Dedicated to employees in health and community services
  • Hostplus: Perfect for young workers in short-term jobs, such as hospitality and retail
  • Media Super: Long history working with the media industry, including print, digital, entertainment and arts
  • Maritime Super: Perfect for employees in the maritime industry
  • Legal Super: Dedicated to helping employees in the legal industry
  • REI Super: Perfect for employees working in the real estate industry and other related industries

So, as you can see there are plenty of options for your superannuation fund. Research and choose carefully, you don’t want to put your food in the wrong cave!

How the market affects your super fund

To understand your superannuation, keeping up with the volatile market is important. It may seem a little foreign to anyone who doesn’t work on the stock market. However, the market can affect the state of your super fund. If you see your super fund drop a little, don’t panic! Your superannuation is a long-term investment and it will most likely perform well in some years and fall in others. That is the fate of our capitalistic market, so, keep track of the market to avoid unnecessary panic attacks.

What about the government pension?

In Australia, the government provides us with a government pension on top of our superannuation. On average, a pensioner may receive around $410 a fortnight as single and $310 each for a couple. This may be enough to survive, but certainly not enough to thrive. That’s where planning for your retirement and superannuation comes in handy to give your retirement the star treatment it deserves.

How super do you need to retire?

On average retirement lasts 25 years – that’s over half of your work life! That means you need a lot of moolah to sustain a comfortable lifestyle. However, before you enter your golden years, it’s important to decide what you define as comfortable. It’s best to begin planning what you want from your retirement. It’s time for a vision board! A physical or digital one will do and begin visualizing what you want from your retirement. Ask yourself,

“What do I want from my retirement?”

Do you want to travel the world? Monkey about with your grandkids? Or invest your time in a much-loved hobby? The sky’s the limit, however, you need to find the right funds to reach that limit.

The Super Guide has calculated the ideal retirement package for anyone looking for a comfortable lifestyle. If you’re a couple you can expect to enjoy a comfortable lifestyle with an annual income of $60,457 with a superannuation sum of $620,000. In addition, add a lump sum from your age pension and you and your partner are ready for a comfy retirement.

If you’re livin’ it up as a single you can enjoy a comfortable lifestyle if you generate an annual income of $44,011 with a superannuation sum of $590,000 in conjunction with an age pension.

Of course, you know you best, so decide what necessities you need to survive the next 25 years and work that into your superannuation contributions.
If your dream retirement is just out of reach, why not consider easy loans to get you cruising around the Caribbean.

Let’s be Pals

Unlike bears, we don’t sleep through our retirement – we have to live and live well! So, keep reminding yourself to treat yo’ future self. You’ll thank yourself one day!
When it comes to financing, we can find the right lender that works for you, so get in touch today! We are 100% online, so we’re always there to help you on your loan journey. Simply hop onto our website and send us a quick message and our loan finding specialists will get back to you.

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Example of how small personal loans work

Loan amount

$200 minimum
$2,000 maximum

Costs

Most small personal loan providers charge up to 20% as an establishment fee upfront. You’ll then pay a 4% monthly fee.

Under the current legislation, most small personal loan providers don’t charge an annual interest rate (you’ll know this as an APR) %.

In APR terms, the maximum annual percentage rate on our loans between $300 and $2000 is 199.43%.

Terms

12
months minumum
12
months maximum

Example:

Loan Amount of $1,000 over 6 months repayable weekly (25 weekly repayments). $1,000 (Principal Amount) + $200 (20% Establishment Fee) + $240 (fees based on 4% per month over 25 weeks) = $1,440 total repayable in 25 weekly installments of $57.60.

WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate

Example of how medium secured personal loans work

Loan amount

$2,100 minimum
$4,600 maximum

Costs

Annual Percentage Rate (APR) is 48% Comparison rate is 67.41% p.a.

Terms

13
months minumum
24
months maximum

Example:

Loan Amount of $3,000 over 18 months repayable weekly (78 weekly repayments). $3,000 (Principle Amount) + $400 (Establishment Fee) + $1,379.06 (reducing interest) = $4,779.06 total repayable over 18 months with weekly installments of $61.27.

WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate