Your Guide To Superannuation In Australia
This page links you to information on every aspect of superannuation funds, from the basics of how they work, including payment methods and caps, and the different types of funds you can hold.
Superannuation is becoming a popular topic. Why is that?
With so much instability around the globe, our financial future is more important than ever – for young and old people alike.
Once considered an “old person’s thing” or something that “just happens”, these days people realise their superannuation deserves some attention.
Neglect your superannuation now and it can have a significant affect on your quality of life down the track.
However, if you give your superannuation the attention it deserves, you can build a far better chunk of cash for the future. Add in some boosts from the tax system and it’s really going to add up for you.
To help you take charge of your super, we’ve linked all of the helpful Etax resources together in one place.
Below you’ll find super fund insights, starting from the basics like including payment methods and getting into donation caps and the different types of funds you can hold.
Plus a few tips to keep you on track for a well-funded retirement!
What is superannuation and why do we need it?
Superannuation, often referred to as “Super”, is a part of your salary that your employer pays into a special retirement savings fund, on your behalf. The government sets a minimum amount that your employer kicks in, and this adds up over time, with interest, to create a sizable account that you can rely on in the future.
Currently, your employer must pay at least 10.5% of your salary into you superannuation fund. This percentage will increase progressively to 12% by July 2025.
If you’re self employed, you need to set up and pay into a super fund yourself (see below for professional advice for choosing a super fund).
It’s important to understand superannuation and how it works, so you can ensure that your money works for you throughout your working life. If you don’t, you may discover, too late, that your fund has very high fees, isn’t doing as well as others or, if you don’t nominate a fund when you change jobs, you may end up with multiples funds and fees, costing you big time in retirement!
Read our starter blog to get up to speed with all the superannuation need-to-know facts:
Can I pay extra money into my superannuation fund?
The simple answer is ‘Yes’!
You can pay extra money into your super fund – and many people do! You can either ask your employer to pay additional money from your pre-tax salary, or pay in extra yourself. Extra payments are a great way to increase your retirement income. It can also help you pay less tax along the way. We’d suggest speaking to a financial planner to see whether this is something suited to your circumstances.
Read more about extra payments, caps and which additional payments can be claimed on your tax return:
Superannuation FAQ:
What is a Unique Superannuation Identifier Number (USI)?
USI numbers were introduced in 2014 when businesses switched to the SuperStream system to pay employees. Your USI a number is unique to your super fund. You need to supply this number if you change superfunds and you may need to supply it to your employer when you start a new job.
How do I find my Unique Superannuation Identifier Number?
You can find your USI number on your annual super statement or your super fund’s website. If you have trouble finding your USI, contact your super provider directly.
What is the difference between a Self-Managed Super Fund (SMSF) and other types of super funds?
SMSFs are becoming more popular with Australians who want better control over their money. There is more work involved, as you are responsible for making sure the fund is managed properly, but the reward is the control you have over where your money is invested and how those investments are structured. Is a SMSF something you’re considering? Take a look at our comparison:
How do I know if I’ll have enough super when I retire?
It’s always good to know if you’re on track or not with your superannuation but how do you know if you are?
The resources below can help you work it out whether you’re on track for a modest or comfortable retirement:
Superannuation Calculators:
How much is enough?
How much super do you want to retire on?
ASFA
Age comparison
How much super should you have?
Effie Zahos
Retirement tracker
What kind of retirement can you afford?
Australian Super
Should I talk to a professional about my superannuation fund?
As with most financial decisions, seeking professional advice is highly recommended. When it comes to choosing and maintaining your superannuation fund, it’s no different.
Your employer will pay your superannuation into their default employer-nominated fund, unless you nominate your own fund. This can get tricky as you move through your career and switch employers, as you need to roll over existing money and keep track of it all. Also, super funds differ, as do the insurances within them, so an employer’s fund may or may not be the right fund for you.
For this reason, it’s highly recommended that you seek independent professional advice as early in your working life as possible. An advisor will help you choose a good fund that suits your circumstances, and assess which type of investment strategy suits you, initially and how it should change over time.
Your future is in your hands
There aren’t many ways you can control your future but as far as superannuation is concerned, you can.
Your retirement may well be years away but those years are valuable. Throughout your career, you can make sure your money is working for you – and growing. Looking after it, adding to it and making sure it’s in the right fund, will help keep your future financially secure.
So make superannuation part of your annual financial health check, chat with an independent advisor when you need advice, and talk to your tax agent about claiming extra super payments on your annual tax return.
Your future really is in your hands.
