Why Is The PSS Contribution Rate So Important For A Successful Retirement?

The PSS rules allow contributing members to contribute at 0% or between 2% and 10% but few people truly understand the financial implications of contributing at the wrong rate. The reality is that the wrong contribution rate can ruin your retirement because the employer contributes less.  This is great news for the employer but a disaster for the PSS member.

At The Financial Advice Shop we are determined to assist PSS members to ensure they are on track to maximise their PSS entitlements and we do this through a cost effective PSS Financial Advice Health Check. By maximising your PSS entitlements you will be making sure your employer has to maximise their contributions on your behalf.

Our dedicated PSS webpage has a range of tips and traps that PSS members might like to consider. If you have questions, we have the answers.

If you, or someone you know needs further assistance, please feel free to contact us and we will see how we can help.


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What Are Two Of The Most Common Mistakes That Members Of The PSS Scheme Regularly Make?

Being a member of one of Australia’s most generous superannuation schemes is not, in itself, enough to ensure you end up with a secure retirement.

The most common mistake members of the PSS Defined Benefit Scheme make is that they do not contribute enough to the scheme during their working career. In effect, many members are making a very big mistake every fortnight and over a long period of time this can be a disaster.

The employer benefit is linked to member contributions and years of service so it is possible for members to severely disadvantage themselves by contributing at a low rate during their working career.

The key to maximising your PSS Scheme is to understand how your after tax contributions affect final retirement benefits. Depending on your salary and years of service, contributing at a rate of only 2% of salary over a long term career could shave $100,000, $200,000 or more from your final retirement benefit.

The second most common mistake members of the PSS Scheme make, and Public Servants more generally, is that they do not commence salary sacrifice to superannuation at the most appropriate time and at the most appropriate level. Usually it is commenced far too late at a low level with adverse retirement consequences.

When it comes to salary sacrifice to superannuation, if you are within 10 years of retirement, it is time to have a serious discussion about your retirement goals and ways to enhance your final retirement position. A discussion is the best way to understand your options, plan a way ahead and then take appropriate action.

What should you do next? It’s really simple: make contact with us to see how we can help you.


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