I have noticed in a lot of blogs references to 401(k) and so i googled it to find out if we have anything similiar here in Australia. And it sounds very like Superannuation, although I could,nt work out if the Employer was obliged to make a contribution or if it was an incentive in a salary package. My Superannuation is paid into my alloted fund every payday by my Employers by law they have to pay in a percentage of your wage, you can also add your own contribution to this which is added after tax, or Salary Sacrifice some of your wages into your fund which is put in before tax, making your taxable income lower. I pay in some before and some after tax, the Government are at present adding $ for $ amounts to the after tax contribution so I am taking advantage of this, and I also am taking advantage of the reduced tax by Salary Sacrificing. I am classed as a low paid worker and so these figures may vary according to your wage structure. I will never have enough Super to retire with as I have left it too late but it should be enough to give me a very large nest egg when I do retire. I would like to take advantage of getting a long service payout out when i retire and this is paid to me after 10 years of continues employment with my firm. This will be due to be paid out in January 2017, so I will be 66 years old then and eligible to be paid my aged pension as well. And so barring accident I can retire on 2nd January 2017 not long now LOL
Started back at work today and I really struggled through the 4 hours I was there, still it can only get better.
Stayed home all day yesterday so I had a no spend day, gotta love them.
Sorry work was a struggle Maureen, hopefully it will get better.
ReplyDeleteThat's good that you get a 10 year payout, work sticking around for. If you don't mind me asking, are you hoping to be debt free by 2016?
I'm going to a talk on my Superannuation on wednesday that my work is holding, it will be interesting to find out more about the "plan" my company is with and what I will need to do.
ReplyDeleteThe 401(k) is American, Canadians have something similar I think. American employers are not required by law to contribute to employees' plans, but many match employee's contributions up to a certain percentage of the employee's salary. Even if you don't get an employer match on your 401(k), your contributions aren't taxed until you start withdrawing them at retirement, so, for now, you're paying less income tax.
ReplyDeleteThe 403(b) is pretty much the same thing as the 401(k), but it's for non-profit organizations.
My employer matched up to 5% of my income so I always made sure that I took 5% of my gross paycheck and put it in my 401K for him to match. With the recession many employers have reduced the amount they match and have done away with matching altogether. If you are lucky enough to have an employer to match your contributions, it is to your benefit to scrimp anyway you can to put in the full matching amount.
ReplyDeleteThanks for your responses, one or two points I did,nt mention. If I decide to leave work before retirement age and take my superannuation out of my fund, i will be taxed on it, but if I leave it in the fund until retirement age then I will get given it tax free.
ReplyDeleteLaura I now only have the two debts and if I pay the smaller of the two off first, and then put that amount into my larger debt, then I will finish the smaller in September 2011 and the larger by September 2014, allowing me to retire debt free. However it is my intention to pay both of these debts off faster than that. As soon as my Daughters Wedding is over I intend to up my payments, and will post about this nearer the time.