Definition of 'Superannuation'
There are two types of superannuation funds:
* A defined contribution fund is where you contribute a certain amount of money each month and your employer also contributes a set amount. The money that you contribute is invested and the returns on your investment will determine how much money you have when you retire.
* A defined benefit fund is where your employer promises to pay you a certain amount of money when you retire. The amount of money that you receive is based on your salary and the number of years that you worked for your employer.
It is important to choose the right superannuation fund for you. There are a number of factors to consider, such as the fees charged by the fund, the investment options available, and the level of risk that you are comfortable with.
You can make voluntary contributions to your superannuation fund in addition to the compulsory contributions. This can help you to save more for your retirement and reach your financial goals.
When you retire, you can choose to withdraw your superannuation as a lump sum or as a regular income. You can also use your superannuation to purchase a life insurance policy or to pay for your funeral expenses.
Superannuation is a valuable asset that can help you to provide for your retirement. It is important to understand how superannuation works and to make the most of your contributions.
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