Superannuation, or ‘super’, is a way to save money for your future. It is important
to understand how much super you’ll need, and how to best manage the money for
Superannuation is attractive because it receives favourable tax treatment, both when you are working and once you have retired.
The government oers these tax savings to encourage you to build your super assets.
The tax benefits of superannuation include:
Contributions made to super may attract a tax deduction or tax offset.
Investment earnings are typically taxed at a rate of 15 per cent, rather than your marginal tax rate of up to 46.5 per cent. Capital gains are taxed at a maximum rate of 15 per cent.
Your super benefit can be paid as a tax-free pension or lump sum when you reach 60 and satisfy the criteria to access your funds.
How much superannuation will you need?
The amount of money you will need in retirement varies from person to person, and depends on:
the kind of lifestyle you want
other income options in retirement (such as part-time work or payments from other investments) that will
supplement your super, and
the age at which you would like to retire.
How can you invest in superannuation?
You invest into super by contributing money into a
superannuation fund. Contributions can be made by you, your spouse, or your employer.
There is a wide range of superannuation funds to suit your individual needs, and we can help determine which one is right for you.
When can you access your superannuation?
Generally, you can only access your super when you
permanently retire from the workforce, and also reach a
minimum age set by a law called your ‘preservation age’.
Other conditions of release apply, for example reaching
age 65 or permanent incapacity.
Managing your own superannuation fund
A self-managed superannuation fund (SMSF) has the same purpose as other super funds – to provide retirement benefits for its members. Like all super funds, an SMSF is a trust.
A trust is a legal arrangement where assets are managed by a person, a group of people, or a company, for the benefit of other people.
How is an SMSF different?
The main difference between a self-managed fund and other types of super funds is the control of the fund. All super funds are controlled by a trustee, but in the case of industry funds, employer funds or personal funds, the trustee is an institution or large entity, such as a company. With an SMSF, the trustees are the members of the fund.
Perhaps the most influential difference with an SMSF is that you have greater control over the investment of your super savings. This is because you are making the investment decisions.
Would an SMSF suit you?
An SMSF is not for everyone. It provides additional control to its members, but it is important to remember that with the additional control comes added responsibility. An SMSF is only appropriate if you have the time, the desire,
and the expertise to manage your super affairs correctly.