What is superannuation
What is superannuation?
Superannuation (or ‘super’) is money that is put aside while you’re working to provide you with an income when you’re older and no longer work. In this article, we help you understand your super.
Here’s a quick summary of how super works in Australia
- When you start working your employer needs to contribute 11.5% of your pre-tax income to your super account.1 This money is invested for you to access later.
- You can add more money to grow your super by making before or after-tax contributions.
- You can usually choose where your super is invested and in which investment option.
- Most super funds also provide basic insurance cover with your super account. CareSuper offer Death, Total & Permanent Disablement (TPD) and Income Protection cover.
- When you get closer to retirement, you can transition your super account into a transition to retirement income product (while still working) or another retirement income product when you turn 60 and no longer work. That way you’ll still receive an income when you’ve finished working.
You’ve probably noticed on your payslip that some of your before-tax salary is paid as super.
In Australia it’s compulsory for your employer to pay a percentage of your salary into a super fund on a regular basis, if you are:
- Employed on a full-time, part-time or casual basis (even if you’re only working in Australia temporarily)
- 18 and over, or
- Under 18 but working more than 30 hours per week.
Compulsory super was first introduced for working Australians in 1992 at a rate of 3%, today it’s 11.5% (12% from 1 July 2025).
This is called the Super Guarantee (SG).
Employers have to pay the super guarantee rate in addition to your regular salary.
This money doesn’t come out of your pocket, but it is paid by your employer into your super account and invested for you over the long term, so that you can use this money when you retire.
Think of it as automatic savings for your future and a way to create an income for once you’ve stopped working.
You can also add to your super and there could be tax advantages as well.
There are lots of strategies to grow your super.
But what if you’re self-employed?
If you’re self-employed, a sole trader or in a partnership, you can choose to make personal super contributions into a super fund to save for your retirement.
So any super you pay to yourself will be up to you, rather than a legal requirement.
Find out how super works if you’re self-employed.
What’s a super fund and how do I choose one?
A super fund is really just a place to invest your money for retirement. You (or your employer) can open a super account in your name to contribute money to save for your retirement.
You can choose which super fund your money is invested in (even if it’s different to the one your employer has chosen).
This choice could make a big difference to how much your super grows over the long term.
There are different types of super funds, and like other investments, some perform better than others, so it’s important to compare super funds and choose the right one for you.
If you don’t tell your employer where you’d like your super to go, they will pay it into either their default fund (the fund they’ve chosen) or your existing super fund (if you have one – this is called your stapled fund).
Industry SuperFunds, like CareSuper are profit-to-member, this means we’re run only to benefit our members and have a history of above average investment returns2 and competitive fees.
The other types of funds include retail funds, which have sharesholders and could have higher fees, and Self-managed super funds (SMSFs), where you manage your own super. Learn more about what’s involved in managing your own super.
Fees can add up
All super funds charge fees and they do vary so it’s good to understand what fees you’re paying and how they compare.
Fees are either a dollar amount or a percentage, or both, and are usually deducted monthly.
They can include administration fees, investment/performance fees, indirect costs, insurance fees, switching fees and advice fees.
Our competitive fees at CareSuper are driven by strong long-term growth on your investment, to maximise your super balance.
It’s the overall benefit to you that counts and just one reason to choose us.
What happens with my money that’s invested in my super fund?
Super can be invested in a range of investment assets, including shares, property, fixed interest and alternatives.
Super funds offer different investment options to cater for different levels of risk and return.
You can choose which option your super goes into.
When a contribution is made to your super, it’s invested on your behalf according to your investment choice(s).
Most super funds will automatically invest your super into a Balanced option if you haven’t made a choice.
When choosing your investment option, you’ll need to consider:
- Your age and how far away from retirement you are
- How comfortable you are with investment risk
- How long before you will be able to access your funds.
As a CareSuper member, you have access to a range of investment options, each with different return targets and levels of investment risk, plus a Direct Investment option.
This variety lets you mix and match your investments to suit your own goals.
If you haven’t made an investment choice, your super will be paid to our Balanced (MySuper) option.
At CareSuper, we invest with one goal in mind: to help you achieve the best possible lifestyle in the future.
How do we invest for that?
We use an actively managed and long-term strategy – driven by a proven investment philosophy.
Plus, our team of experts is always looking for ways to boost your net returns.
How much super do I need to retire?
Ever wondered how much super you’ll need? You might still have many years to work but it’s never too early to plan for your future. The amount of super you'll need when you retire will depend on:
- Your big costs in retirement (paying off your mortgage/paying rent, food, medical costs, aged care) and
- The lifestyle you want (travel, entertainment, eating out).
Your ideal retirement
Everyone’s ideas about their ideal retirement are different, some people plan on travelling the world, others want to play golf and spend time with their family and friends, and some want to live by the beach. It’s as individual as you are, that’s why you need to consider the lifestyle you’d like to achieve and then work out how much you’ll need.
To help estimate the superannuation balance you will require, the ASFA Retirement Standard provides a comprehensive breakdown of expenses for a comfortable and modest lifestyle, for couples and singles to maintain a healthy, vital and connected lifestyle in retirement.
You also have access to our Retirement lifestyle calculator to determine how your super is tracking and how much income you might have in retirement to fund your lifestyle.
Growing your super
You might realise that your employer super contributions and investment earnings alone may not be enough to fund the lifestyle you want when you retire. You might be thinking ‘well how do I grow my super?’, the good news is there’s lots of ways to grow your super and set yourself up for a better life after work.
Combining your super accounts to the one low-cost super account, contributing extra to your super and ensuring you’re in the right investment option(s) are just a few ways to boost your super. See our tips to help grow your super.
When can I access my super and how?
Because super is designed as savings for your future, it’s protected by rules around when you can access it.
You can access your super when you:
- Reach 60 and retire
- Reach 60 and leave an employer
- Reach 60 and continue to work and set up a transition to retirement strategy
- Reach 65 years old (even if you haven’t retired).
There are certain circumstances where you can get early access to your super, such as specific medical circumstances, financial hardship, or if you're eligible for the First Home Super Saver Scheme.
Insurance and other benefits
Most super funds offer insurance along with your super account as well as other benefits like financial advice and education.
Super funds typically offer three types of insurance for members:
- Death insurance (also known as life insurance)
- Total and permanent disablement (TPD) insurance and
- Income protection insurance.
Insurance through your super fund can be an affordable and tax-effective way to protect you and your loved ones financially if something unexpected happens.
With CareSuper, you have access to group rates with fees deducted from your super account, and our age and gender-based pricing model helps us deliver value for you.
We also offer financial advice and other member benefits.
We’re here to help
While superannuation is complex, there are many ways that we can support you with your super.
We have an education hub, events and webinars and our super experts are on hand if you need to contact us.
Extra support is available
We’re also here especially if you need a bit of extra help with your super.
Whether you’re hearing impaired, have English as your second language or live with a disability or illness, these are just some of the reasons you might need additional support.
We offer a wide range of services designed to provide additional support.
Information correct as at 30 May 2025.
1 To be eligible to receive super you must be: employed on a full-time, part-time or casual basis (even if you’re only working in Australia temporarily), 18 and over, or under 18 but working more than 30 hours per week.
2 Past performance isn’t a reliable indicator of future performance. The value of investments can rise or fall, and investment returns can be positive or negative.