Retirement

[crash]

I'm curious though, Crash...do you, as the employee, have a choice of how your money is invested?

Yes you do. You have the choice of which fund you wish your employer to pay into and many superannuation funds let you choose how you invest. Domestic share portfolios, international, blue chip, high risk or a mix of all. You can choose to just put it in term deposit.

You can also create your own self managed super fund, but there are strict rules. You can create your own share portfolio. You can buy property with it, but you can't, nor can your family or friends, live there. The property must show a rental return consistent with the market rate yada yada. Your smsf can also borrow money to acquire property and you can negative gear that property to offset the 15% tax on your fund.

Your smsf must prepare a quarterly report called a Business Activity Statement to the tax office.

The tax part sounds odd I guess, but we have a far different tax system here to the US. We pay federal tax on our income. We don't pay state tax on it. Any self contributions to your super are before tax. So paying 15% is better than ~30%, if you are in the higher tax bracket, to put it away for later. Taking it away 'before tax' also lowers the amount the tax office calculates as your 'taxable income' which means you pay less overall income tax.

You cannot draw on your super in Australia until you are 55, with the exception of a few extenuating circumstances. Most people gear their super to rollover into an annuity fund, and they avoid paying any further tax when drawing on the money.