Superannuation (super) is your long-term savings plan for retirement. It’s designed to grow over your working life, giving you a financial cushion when you stop working. Understanding how super works and making a few smart choices now can help you maximise your retirement savings without unnecessary stress.
What Is Super and Why Does It Matter?
Superannuation is an investment in your future. In Australia, it’s the main way most people save for retirement.
Here’s how it works:
✅ Your employer must pay a percentage of your salary into your super fund.
✅ Your super fund invests and manages this money until you retire.
✅ You can choose how your money is invested.
✅ You can make extra contributions to grow your super faster.
✅ The government provides tax benefits to encourage super savings.
Think of super as a long-term investment that rewards patience. The earlier you engage with it, the better your financial future will be!
How Super Contributions Work
Employer Contributions: The Super Guarantee (SG)
If you’re eligible, your employer must pay 11% of your salary (as of 2024) into your super fund. This is called the Super Guarantee (SG), and it’s paid on top of your wages.
Making Extra Contributions
Want to grow your super faster? You can make additional contributions:
✔ Concessional Contributions (before tax) – These include employer SG contributions and salary sacrifice contributions. They’re taxed at 15% instead of your regular income tax rate.
✔ Non-Concessional Contributions (after tax) – You can contribute extra from your take-home pay, and there’s no contributions tax.
💡 Tip: Be mindful of contribution caps! If you go over the limits, you may have to pay extra tax.
Choosing the Right Super Fund
Not all super funds are the same. You have a choice!
✔ MySuper Funds – Default low-fee funds designed for simplicity.
✔ Choice Super Funds – Offers more investment options, such as shares or property.
✔ Self-Managed Super Funds (SMSFs) – You control investments, but they come with responsibilities and costs.
How to Compare Super Funds
Look at these key factors before choosing a fund:
📈 Investment Performance – How has the fund performed over the long term?
💰 Fees – Lower fees mean more money stays in your super.
🔒 Insurance Options – Some funds offer life and income protection insurance.
🛠 Investment Options – Can you choose different risk levels or asset classes?
💡 Tip: The YourSuper Comparison Tool (on the ATO website) makes it easy to compare funds.
Tracking and Managing Your Super
Lost or Multiple Super Accounts? Consolidate!
If you’ve changed jobs, you might have multiple superannuation accounts. This means paying multiple sets of fees, and ain’t nobody got time for that.
🔍 Find and combine your super via myGov > ATO Online.
📢 Ask your employer to pay into your chosen fund.
💡 Before consolidating, check if you’ll lose insurance benefits.
Keep an Eye on Your Superannuation
Regularly checking your super helps you stay on top of contributions and investment performance. Set a reminder to review it at least once a year.
When and How Can You Access Your Super?
Your super is preserved (i.e. no touching!) until you meet certain conditions:
📅 Turning 65 – You can access your super whether you’re still working or not.
📅 Reaching Your Preservation Age & Retiring – Your preservation age depends on your birth year (ranges from 55 to 60).
📅 Transition to Retirement (TTR) Strategy – If you’re still working but aged 60+, you can access part of your super.
⚠ Be Careful of Scams – It’s illegal to withdraw your super early unless you meet specific hardship or medical conditions.
How to Boost Your Super
Want to give your super a boost? Here’s how:
✔ Salary Sacrifice – Ask your employer to put extra pre-tax income into your super.
✔ Government Co-Contribution – If you earn under a certain amount, the government may add up to $500 to your super if you make voluntary contributions.
✔ Spouse Contributions – You may get a tax offset by contributing to your partner’s super.
✔ Downsizer Contribution – If you’re 55+ and selling your home, you may be able to contribute up to $300,000 from the sale proceeds.
How Is Superannuation Taxed?
Superannuation has tax benefits, but different rules apply:
📌 Contributions Tax – Employer and salary sacrifice contributions are taxed at 15%.
📌 Investment Earnings Tax – Your super fund pays 15% tax on earnings.
📌 Withdrawals Tax – If you’re 60 or older, withdrawals are tax-free in most cases.
💡 Tip: If you’re unsure about tax, consult your super fund or a financial advisor.
Make Super Work for You
Super is a powerful way to save for retirement. A little attention now can make a big difference later.
✅ Choose a fund that suits your needs.
✅ Keep track of your super and consolidate if necessary.
✅ Make extra contributions if possible to grow your super faster.
✅ Know when and how you can access your super in retirement.
If you’re unsure about your super strategy, seek financial advice. The sooner you take control, the better your future will be!
💡 Need help with your super? Contact Creo Wealth for guidance tailored to your needs.
