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Superannuation 101

Superannuation, often referred to as ‘super’ is money put aside during your working life to use for retirement. The average Australian can expect around 25 years in retirement and super can assist in creating an income stream for when you stop earning a salary.

Choosing a super fund

In most cases you can choose any complying super fund by completing a ‘Superannuation (super) standard choice form’, which you can find on the ATO (Australian Taxation Office) website.

Some people who are covered by industrial agreements and members of defined benefit funds will not have this choice. Due to restrictions in these cases it is often worth discussing with your financial planner other options to assure you are maximising your super potential.

Decide how your super is invested

You have the opportunity to decide how your super is invested. This can be an important choice as it may change the final outcome of your super balance. Often super funds will invest your money in the ‘Balanced Option’ if you have not given them further instructions, however they may have a number of different investment options and you can choose the strategy best for your circumstances.

How much does your employer need to contribute to your super?

Your employer needs to contribute 9.5% of your salary into your super fund, this is known as The Superannuation Guarantee. The rate has been set by the government and on September 2014 it was announced that the SG (The Superannuation Guarantee) will remain at 9.5 % until 1 July 2021 when it will then increase 0.5% per year until 2025 when it will reach 12%.

Other contributions to your super

You can also contribute to your super through voluntary contributions, salary sacrifice, government co-contributions and spouse contributions; note that caps are applied to your super contributions. There are a number of tax advantages created by investing money into your superannuation fund.


Typically, super funds provide three types of insurance; Life insurance, Total and permanent disability cover and income protection. You can find out what you are covered for by contacting your super fund; most supers will have a minimal level of life insurance as a default insurance cover. The advantage of having insurance through your super fund is that you can pay your premiums from your super account balance. Depending upon your circumstances you may choose to have your insurance through your super fund or externally, alternatively a combination of the two may be suitable.

When can I access my super?

You can access your super when you are age pension age or preservation age.

  • Preservation age – to access your super tax free you need to be retired and have reached your preservation age:
Date of birthYour preservation age
Before 1 July 196055
From 1 July 1960 until 30 June 196156
From 1 July 1961 until 30 June 196257
From 1 July 1962 until 30 June 196358
From 1 July 1963 until 30 June 196459
On or after 1 July 196460
  • Age pension age – for many of us the Age Pension is an important income for our retirement; 80% of Australians who have reached Age Pension age currently receive a part or full pension.
If you were born betweenYou qualify for age pension at age
1 July 1952 to 31 December 195365 years and six months
1 January 1954 to 30 June 195566 years
1 July 1955 to 31 December 195666 years and six months
From 1 January 195767 years

Your financial adviser can also recommend a transition to retirement strategy that will ease you into retirement.

There are limited circumstances where you can access your super early, however if your circumstances relate to illness or hardship you can apply to the Department of Human Services for an early release.

Superannuation is your money; so don’t be complaisant. It can make a difference between retiring comfortably or continuing to work.

Please contact us for information as to how you can best manage your superannuation. Phone (03) 5976 8426

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