Let time and compound interest work for you
1About Mark’s example: These figures are illustrative only and were calculated using the MoneySmart calculator (accessed 13 August 2020). The calculation assumes savings of $100 per month, net of all fees and taxes, for a time period of 30 years, interest compounds monthly, earnings are reinvested and fully credited at the end of each month, and provides an estimate of the future value of savings, which could vary significantly over time if any change is made to these assumptions. The interest rate assumed is 6.5% p.a. and is net of all fees and taxes. The amount is not a prediction of actual returns, which are likely to vary over time, and actual dollar values are used with no adjustment for the effect of inflation. Differences in returns (which may be positive or negative), and fees will alter the outcome. These figures are provided only to demonstrate the principle of compounding and are not intended to represent projected returns in a Qantas Super account.
Use your super now
Though your super is, for the most part, set aside for your time after work, the government has introduced a way for Australians to access part of their super to help pay for a deposit for a home.
With a survey finding 75 of people under 30, and 69 percent of people aged 30 and above believe owning a property is still the great Australian dream, the Federal Government introduced the First Home Super Saver Scheme (FHSS) in 2017 to help more Australians achieve it.
If you are a first home buyer and both the following apply to you, you may be eligible to participate in the FHSS scheme:
- You either live in the premises you’re buying or intend to as soon as practicable; and
- You intend to live in the property for at least six months within the first 12 months you own it, after it’s practicable to move in (if you enter into a contract to build a home, the timeframe may be different)
Under the FHSS scheme, you can apply to have a maximum of $15,000 of your voluntary contributions from any one financial year included in your eligible contributions to be released under the FHSS scheme, up to a total of $30,000 contributions across all years. You’ll also receive the earnings that relate to those contributions.
There are a number of important things to know about the FHSS – learn more.