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Wise superannuation and insurance choices make for a secure financial future

With Australia ’s population ageing at an alarming rate, planning for retirement has never been more important.

The ratio of taxpayers to retirees is expected to drop significantly over the next 20 years, severely affecting the level of resources available to meet the social expenditure required. In other words, there will not be enough people working and paying taxes to finance the increasing number of people needing pensions.

Less money being collected by the Government means less money available to be paid out as pensions. Coupled with greater life expectancies (on average, the next generation of retirees are expected to live for over 20 years beyond retirement), many people will struggle just to make ends meet. This is the frightening reality awaiting the majority of Australians heading into retirement.

Take Control

The compulsory nature of superannuation may make it seem as if you have little control over your financial future. On the contrary, superannuation is one of the largest financial investments you will ever have, so it’s important that you take an active interest in your retirement savings, starting today!

Just like your bank account and other investments, it is important to review your superannuation investment from time to time. You may have joined a super fund or life company some years ago and feel secure in the knowledge that your retirement savings are in good hands. But how much do you really know about this fund? What is the fee structure? How well is it performing? Does it provide access to other benefits like insurance cover?

As a member-owned fund, Prime Super has gained a strong reputation for its commitment to rural and regional Australians, providing sound investment performance, efficient administration and access to low cost benefits like Death, Disablement and Income Protection insurance cover.

Prime Super’s flat fee structure of only $0.70 per week (Prime Essentials members) and $1.00 per week (Prime Choice members) ensures the bulk of your retirement savings are invested and working for you. Beware of the fund whose charges are based on a percentage of your asset base! A one percent management charge may not sound like much, but as your savings grow, so too will the fees you are paying and the profits reaped by the fund provider.

If the returns promised by this fund also fail to meet expectations, you may find that what little growth you are getting is being swallowed by both account keeping fees and the effects of inflation. If this situation is not addressed, the long-term results could be disastrous!

To regain control of your financial future, it may be necessary for you to consider leaving this fund. Some funds and life companies may impose exit penalties on the early release of benefits, but it is often still worthwhile moving your super monies into a fund like Prime Super. This is not as difficult as it may seem and help is available to transfer your super savings quickly and at no cost.

Making your money work harder, not you

Superannuation is one of the most tax-effective investments available. Many contributions to superannuation are tax deductible, so it may prove more financially viable to have money paid into your superannuation account than other investment vehicles.

In addition, the tax on investment earnings in a superannuation fund is generally only 15%, significantly less than the marginal tax rates applicable to your earnings. This means more of your money is working for you, enabling you to reach your savings goals faster.

If you are an employee, salary sacrifice payments (additional contributions to superannuation in lieu of wages received) provide another way of reducing your tax bill and boosting your retirement savings. Reducing your weekly pay cheque by $20 and contributing this amount to your super account may not seem like much, but the tax savings, combined with the power of compound interest, may see you many thousands of dollars better off in retirement.

Don’t do all the hard work yourself! Speak to your employer about making salary sacrifice payments and get your money working harder for you today.

Insuring Your Greatest Asset – YOU

Insurance is one of the most important tools you have to protect your assets, income and lifestyle. But few people are adequately protected against economic loss.

If you’re like most people, your ability to get up each day and earn an income is one of your most valuable assets. What would you do if you became sick or injured and couldn’t work? How would you pay your bills? How would you maintain your standard of living? Would your family survive?

Your chances of becoming sick or injured or dying prematurely at some stage during your working career are probably higher than you would expect. Many people do not hesitate to insure their car, house or contents, but fail to recognise the importance of protecting their income. The following alarming statistics highlight the realities of life on Australian farms:

The Health & Safety of Australia’s Farming Community: An Alarming Reality

• One death every three days on Australian farms;
• Tractor deaths due to rollover and run-over are the major cause of on-farm death in Australia ;
• Non-intentional, on-farm injuries result in approximately 150 deaths, 6500 hospital admissions and 6000 workers’ compensation claims each year;
• Male farmers face a 40% increase in age standardised death rates compared with the male population of Australia ;
• As well as medical costs, farm injury results in significant direct farm costs such as damage to plant and equipment and labour costs.

Source: Rural Industries Research and Development Corporation and Australian Centre for Agricultural Health and Safety (2000).

Prime Super provides members and employers with the opportunity to protect against the unexpected with low cost Death and Total & Permanent Disablement insurance cover.

As access to this cover is provided as part of your superannuation arrangements, it is likely to be broader and most cost-effective than you could arrange on your own. This is because Prime Super has the advantage of membership numbers to negotiate favourable premium rates and policy conditions with insurance providers.

Cover is provided 24 hours a day, 7 days a week, not just when you’re at work, so you can rest assured Prime Super have got you covered.