Your guide to superannuation
Your guide to superannuation
Super might seem tricky to understand, but it doesn’t have to be. Get on top of the basics with our super guide.
What is super?
Super is money that’s automatically saved for you from each pay to help you save for retirement.
Your employer must pay a percentage of your earnings into your super account and your super fund invests the money, giving it the best opportunity to grow. And, as an incentive to help you save, super is a tax-effective way to save for your retirement. Here’s why:
- The money you contribute before tax (employer payments and salary sacrifice) is generally taxed at 15 per cent, which is lower than most people’s marginal tax rates (additional 15% tax applies for high income earners)
- investment earnings inside super are taxed up to 15 per cent.
How to get access to your super
You can access your super when you:
- Reach your preservation age and retire
- Reach your preservation age, continue to work and set up a transition to retirement strategy
- Are 65 years old (even if you haven’t retired).
Your ‘preservation age’ ranges from 55 to 60 depending on the year in which you were born. You can find out your preservation age on the ATO website.
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.
Preparing for retirement
No matter what stage of life you’re at now, it’s never too late (or early!) to put yourself in a better retirement position. And remember, we’re here to help you prepare for life after work with super and retirement calculators, education resources and different financial advice options to suit your needs.
Your super is there to support you when you retire, so you can live the life you want. Whether you’re planning on reducing your working hours or finishing up work altogether, we’re here to help you make the most of your situation and give you choices and control over how you receive your future income.
Employer super contributions
Your employer is required to make superannuation guarantee (SG) contributions of at least 11.00% of your ordinary time earnings into your super account.
If you’ve actively selected a super fund, your employer will pay your SG payments to that fund. If you don’t, when you start a new job, your employer will contact the ATO to see if you have an existing super fund linked to you (your ‘stapled’ fund ) and pay your super to that fund.
Boosting your super
Employer super contributions alone may not give you the lifestyle you want when you retire. Good thing you have choices when it comes to growing your super, with possible tax deductions on offer too.
There are different types of contributions and different limits for how much you can contribute.
The three most common types of super contributions are:
- Concessional (before-tax) contributions, including employer SG contributions and salary-sacrifice contributions
- Non-concessional (after-tax) contributions
- Government co-contributions
The government has set limits (known as caps) on the contributions you can make to your super in a single year without having to pay extra tax.
|Concessional (before-tax) contribution cap||$27,500|
|Non-concessional (after-tax) contribution cap||$110,000|
Claiming a tax deduction
You may be able to claim a tax deduction on your next tax return for any personal (after-tax) super contributions you’ve made. To apply for a deduction, you’ll need to complete a Notice of Intent.
Your super is your money and you get to have a say in how it’s invested.
At CareSuper, we understand no two members are the same. That’s why we offer 12 different investment options, plus the Direct Investment option (DIO). This variety lets you mix and match your investments to suit your own goals.
Choosing a super fund
Choosing a super fund is an important decision and there’s several things to consider when choosing the right fund for you. From performance, to fees, to whether the fund is an industry fund or retail fund and their insurance offering, you’ll want to make sure your fund is working for you and your goals.