Australians missing out on superannuation

HUNDREDS of thousands of Australians are neglecting their superannuation. What should you do to get your retirement savings on track?

HUNDREDS of thousands of Australians are not paying themselves super and leaving themselves in a worrying situation once they stop working.

There are more than 2 million small business operators in Australia and new results show one in four feel they are underprepared for retirement.

New analysis from business management firm MYOB found less than one third pay themselves any superannuation, leaving them well short of retirement savings once they stop work.

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The Council of Small Business of Australia’s chief executive officer, Peter Strong, said often smaller operators’ “natural behaviour is to put money back into the business.”

“A lot of people see their business as their retirement,’’ he said.

“If this business cannot be sold or it may not sell for much it’s their retirement.”

He said compliant SMEs who do pay their employees super — which they are required to do by law — often skip paying themselves any retirement money.

Employers are required to pay compulsory superannuation repayments of 9.5 per cent to their employees.

However SMEs are not required to pay themselves their own super.

Australian employees must be paid compulsory superannuation of 9.5 per cent of their wage.

Mr Strong said they shouldn’t neglect their own retirement savings.

“They should be putting their savings into a superannuation account because in the end if they don’t they will be the ones that suffer,’’ he said.

The report revealed the biggest area of concerns for small business operators are how to fund their retirement (19 per cent), followed by the cost of living (14 per cent), superannuation (12 per cent) and government or law changes.

MYOB’s head of customer marketing Jane Betschel said often SMEs hoped there would be a saviour along the line to help fund their retirement.

“They often hope their business will earn them enough income to keep them going or other investments will come along,’’ she said.

“Or sometimes they say they are going to have to keep working right up until the can’t work anymore.”

Ms Betschel urges businesses to get some financial advice and look at how they are handling their cashflow managements.

There are many online tools will also help with directing superannuation payments into a fund for the business owner.

“Pay yourself a regular salary and regular superannuation,’’ Ms Betschel said.

“Keep track of all cashflow through your software and through your bookkeeper and accountant.”

She said often Australians get to the end of financial year when they are faced with tax bills and then their superannuation payments get overlooked.

@sophieelsworth