What is an SMSF and should you get one?
If you have a lot of super and understand the financial and legal responsibilities, an SMSF could be of more benefit to you than an APRA regulated super fund.
Product | Past 5-year return | Admin fee | Company | Calc fees on 50k | Features | SuperRatings awards | Go to site | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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9.61% | $0 | ![]() QSuper Lifetime | $465 | Advisory services Death insurance Income protection Online access Term deposits Variety of options | ![]() ![]() | More details | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
9.55% | $117 | ![]() AustralianSuper | $417 | Advisory services Death insurance Income protection Online access Term deposits Variety of options | ![]() ![]() | More details | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
9.5% | $78 | ![]() Hostplus Executive | $533 | Advisory services Death insurance Income protection Online access Term deposits Variety of options | ![]() ![]() ![]() ![]() | More details | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
9.39% | $96 | ![]() UniSuper Accumulation - MySuper | $366 | Advisory services Death insurance Income protection Online access Term deposits Variety of options | ![]() ![]() ![]() ![]() | More details | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
9.09% | $78 | ![]() Cbus Industry Super | $538 | Advisory services Death insurance Income protection Online access Term deposits Variety of options | ![]() ![]() ![]() ![]() | More details | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
9.06% | $78 | ![]() MTAA MySuper | $443 | Advisory services Death insurance Income protection Online access Term deposits Variety of options | ![]() ![]() | More details | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
9.02% | $78 | ![]() Sunsuper - Corporate | $533 | Advisory services Death insurance Income protection Online access Term deposits Variety of options | ![]() ![]() ![]() ![]() | More details | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
9% | $0 | ![]() Grow Wrap Super | $365 | Advisory services Death insurance Income protection Online access Term deposits Variety of options | ![]() | More details | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
9% | $0 | ![]() Macquarie Wrap - Super Accumulator | $505 | Advisory services Death insurance Income protection Online access Term deposits Variety of options | ![]() | More details | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
8.97% | $57 | ![]() Mercy Super - MySuper | $660 | Advisory services Death insurance Income protection Online access Term deposits Variety of options | ![]() | More details |
Along with your health and loved ones, one of the most important things to consider in the golden years of your retirement is your superannuation.
These days, most people living in Australia can expect to enjoy 20 or more years of retirement. When that time comes, your superannuation is an invaluable nest egg to have: a regular income that can supplement or even substitute the age pension.
By taking the time to understand how Australian superannuation works, you can help set yourself up for future financial security.
Superannuation (also known as 'super') is a portion of your before-tax wage set aside by your employer for you to live on when you reach retirement. The money is placed in a fund where it accrues throughout your working life. It is also invested in various assets, such as shares, property, cash or commercial ventures.
When you start a new job, your employer will request the name of your current Australian super fund, usually through an Australian Taxation Office (ATO) standard choice form. If you don't choose a fund, they will select one for you.
Superannuation companies in Australia operate four different types of professionally-managed funds:
You can also opt for a fifth type of fund, known as a Self-Managed Super Fund (SMSF), which allows you to directly control how your superannuation is invested rather than outsourcing the job to a superannuation company.
Comparing superannuation funds can be tricky, because there are more than 200 different super funds in Australia.
It's important to do your research or speak to a financial planner when deciding which fund works for you, because the market is large and funds often change their policies. Also,
Some areas to consider are:
Unfortunately, it's impossible to say what the best super fund is, for four reasons:
How much super you need depends on when you plan to retire, your housing situation and the standard of living you prefer.
As a rough guide, consider the Association of Superannuation Funds of Australia's retirement standard benchmarks:
65 year old singles | 65 year old couples | 85 year old singles | 85 year old couples | |
---|---|---|---|---|
Modest lifestyle | $27,368 | $39,353 | $25,841 | $36,897 |
Comfortable lifestyle | $42,764 | $60,264 | $40,636 | $56,295 |
Source: Association of Superannuation Funds of Australia - assumes that the retirees own their own home outright and are relatively healthy
Once you've estimated how much super you'd like to retire on, you can use the government's super calculator to estimate what your super balance may look like when you retire, given your current rate of contributions.
You can access your superannuation when you reach your 'preservation age', which is between the ages of 55 and 60 depending on when you were born.
Date of birth | Preservation age |
---|---|
Before 1 July 1960 | 55 |
1 July 1960 - 30 June 1961 | 56 |
1 July 1961 - 30 June 1962 | 57 |
1 July 1962 - 30 June 1963 | 58 |
1 July 1963 - 30 June 1964 | 59 |
From 1 July 1964 | 60 |
Source: ATO
You can access your super early by applying to the Department of Human Services or your super fund in special circumstances, such as severe financial hardship, a terminal medical diagnosis, or if you're a temporary resident leaving Australia.
Be wary of operators who claim they can offer you early access to your super. These operations are illegal and can incur heavy penalties.
Most countries have some form of superannuation in place. The bedrock of Australia's superannuation system is the superannuation guarantee, through which employers must contribute a percentage of their employee's ordinary time earnings into their super fund.
You are eligible for the super guarantee if you are:
The superannuation guarantee is currently 9.5 per cent of a worker's wage, and is legislated to grow over the coming years:
Period | General super guarantee (%) |
---|---|
1 July 2002 - 30 June 2013 | 9.00 |
1 July 2013 - 30 June 2014 | 9.25 |
1 July 2014 - 30 June 2021 | 9.50 |
1 July 2021 - 30 June 2022 | 10.00 |
1 July 2022 - 30 June 2023 | 10.50 |
1 July 2023 - 30 June 2024 | 11.00 |
1 July 2024 - 30 June 2025 | 11.50 |
1 July 2025 - 30 June 2026 and onwards | 12.00 |
Source: ATO
If you're self-employed, there is no system to ensure you contribute regularly to your super account. You can make contributions by putting aside a lump sum when cash flow allows, or if you pay yourself a wage, provide your own superannuation guarantee by putting the relevant amount of your before-tax income into super.
Australian superannuation is a tax-effective system designed to help people save for retirement. Your employer's contribution into your super fund, for example, is taxed at only 15 per cent - less than half the average marginal tax rate for most workers.
This means putting extra contributions towards Australian super can be a good way to take advantage of tax incentives offered by the government - not to mention save for your future.
You can contribute extra to your super in two ways:
Across Australia, there was just under $18 billion worth of lost super at the end of June 2018. If you've moved jobs and haven't given your super details to your employer, you may have lost super spread across multiple funds, or held by the ATO on your behalf as unclaimed super.
Consolidating your super into one fund not only cuts down on account fees; it also makes it easier to manage your savings. The good news is that finding lost super is relatively easy to do:
If you are on a lower income, you may be eligible for the Low Income Superannuation Tax Offset (LISTO): a co-contribution scheme established by the government to help workers on low incomes save more superannuation in Australia.
LISTO refunds up to $500 of the tax paid on concessional (before-tax) super contributions for workers with a yearly income of up to $37,000. The benefit is paid directly to your super fund.
Under the Australian superannuation system, you can contribute to your spouse or de facto partner's super by 'contribution splitting': having some of your super placed into your partner's account.
Contribution splitting can only be done at the end of the financial year. It's a handy option if, for example, your partner takes time off work to care for children and needs to top up their super.
RateCity allows you to compare Australia's superannuation funds according to performance, fees charged and features. This can help you ensure your retirement is in the best possible hands.
Laine Gordon is the Head of Public Relations at RateCity. With a background in journalism, Laine brings over a decade of experience in personal finance to the team. She is passionate about helping people get out of debt, save money, and make better decisions about their own finances.
Accessing your superannuation is a simple administrative procedure ā you just ask your fund to pay it. You can access your superannuation in three different ways:
However, please note that your superannuation fund will only be able to make a payout if you meet the āconditions of releaseā. The conditions of release say you can claim your super when you reach:
The preservation age has six different categories:
Date of birth | Preservation age |
---|---|
Before 1Ā July 1960 | 55 |
1Ā July 1960 ā 30Ā June 1961 | 56 |
1Ā July 1961 ā 30Ā June 1962 | 57 |
1Ā July 1962 ā 30Ā June 1963 | 58 |
1Ā July 1963 ā 30Ā June 1964 | 59 |
From 1Ā July 1964 | 60 |
There are also seven special circumstances under which you can claim your superannuation:
You or your partner could be forced to surrender part of your superannuation if you divorce, just like with other assets.
You can file a claim for division of property ā including superannuation ā as soon as you divorce. However, the claim has to be filed within one year of the divorce.
Your superannuation could be affected even if youāre in a de facto relationship ā that is, living together as a couple without being officially married.
In that case, the claim has to be filed within two years of the date of separation.
Either way, the first thing to consider is whether youāre a member of a standard, APRA-regulated superannuation fund or if youāre a member of a self-managed superannuation fund (SMSF), because different rules apply.
Standard superannuation funds
If your relationship breaks down, your superannuation savings might be divided by court order or by agreement.
The rules of the superannuation fund will dictate whether this transfer happens immediately, or in the future when the person who has to make the transfer is allowed to access the rest of their superannuation (i.e. at or near retirement).
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SMSFs
If your relationship breaks down, you must continue to observe the trust deed of your SMSF.
So if you and your partner are both members of the same SMSF, neither party is allowed to use the fund to inflict āpunishmentā ā such as by excluding the other party from the decision-making process or refusing their request to roll their money into another superannuation fund.
This no-punishment rule applies even if the two parties are involved in legal proceedings.
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Financial consequences
Superannuation funds often charge a fee for splitting accounts after a relationship breakdown.
Splitting superannuation can also impact the size of your total super balance and how your super is taxed.
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A superannuation fund is an institution that is legally allowed to hold and invest your superannuation. There are more than 200 different superannuation funds in Australia. They come in five different types:
Retail funds are usually run by banks or investment companies.
Industry funds were originally designed for workers from a particular industry, but are now open to anyone.
Public sector funds were originally designed for people working for federal or state government departments. Most are still reserved for government employees.
Corporate funds are arranged by employers for their employees.
Self-managed super funds are private superannuation funds that allow people to directly invest their money.
Superannuation is designed to provide Australians with money in their retirement. The government has strict rules around when people can take that money out of their fund because it wants to prevent people eroding their savings before they reach retirement.
As a general rule, you can only take money out of your superannuation fund when you reach:
That said, you can take money out of your superannuation fund early based on one of these seven special conditions:
Superannuation is paid by employers to employees. Employers are required to pay superannuation to all their staff if the staff are:
This applies even if the staff are casual employees, part-time employees, contractors (provided the contract is mainly for their labour) or temporary residents.
Currently, the superannuation rate is currently 9.5 per cent of an employeeās ordinary time earnings. This is scheduled to rise to 10.0 per cent in 2021-22, 10.5 per cent in 2022-23, 11.0 per cent in 2023-24, 11.5 per cent in 2024-25 and 12.0 per cent in 2025-26.
Employers must pay superannuation at least four times per year. The due dates are 28 January, 28 April, 28 July and 28 October.
You can withdraw your superannuation (or at least some of it) when you reach āpreservation ageā. The preservation age is based on date of birth. Here are the six different categories:
Date of birth | Preservation age |
---|---|
Before 1Ā July 1960 | 55 |
1Ā July 1960 ā 30Ā June 1961 | 56 |
1Ā July 1961 ā 30Ā June 1962 | 57 |
1Ā July 1962 ā 30Ā June 1963 | 58 |
1Ā July 1963 ā 30Ā June 1964 | 59 |
From 1Ā July 1964 | 60 |
When you reach preservation age, you can withdraw all your superannuation if youāre retired. If youāre still working, you can begin a ātransition to retirementā, which allows you to withdraw 10 per cent of their superannuation each financial year.
You can also withdraw all your superannuation once you reach 65 years.
When you start a job, your employer will give you whatās called a āsuperannuation standard choice formā. Hereās what you need to complete the form:
You should also provide your tax file number ā while itās not a legal obligation, it will ensure your contributions will be taxed at the (lower) superannuation rate.
You can withdraw your superannuation when you meet the āconditions of releaseā. The conditions of release say you can claim your super when you reach:
The preservation age ā which is different to the pension age ā is based on date of birth. Here are the six different categories:
Date of birth | Preservation age |
---|---|
Before 1Ā July 1960 | 55 |
1Ā July 1960 ā 30Ā June 1961 | 56 |
1Ā July 1961 ā 30Ā June 1962 | 57 |
1Ā July 1962 ā 30Ā June 1963 | 58 |
1Ā July 1963 ā 30Ā June 1964 | 59 |
From 1Ā July 1964 | 60 |
A transition to retirement allows you to continue working while accessing up to 10 per cent of the money in your superannuation account at the start of each financial year.
There are also seven special circumstances under which you can claim your superannuation:
Opening a superannuation account is simple. When you start a job, your employer will give you whatās called a āsuperannuation standard choice formā. Hereās what you need to complete the form:
You might want to provide your tax file number as well ā while itās not a legal obligation, it will ensure your contributions will be taxed at the (lower) superannuation rate.
Superannuation is paid by employers to employees, at least once every three months. The āsuperannuation guaranteeā is currently 9.5 per cent ā which means that your employer must pay you superannuation equivalent to 9.5 per cent of your salary. The guarantee is scheduled to rise to 10.0 per cent in 2021-22, 10.5 per cent in 2022-23, 11.0 per cent in 2023-24, 11.5 per cent in 2024-25 and 12.0 per cent in 2025-26.
Superannuation is generally taxed at 15 per cent. However, if you earn less than $37,000, you will be automatically reimbursed up to $500 of the tax you paid. Also, if your income plus concessional superannuation contributions exceed $250,000, you will also be charged Division 293 tax. This is an extra 15 per cent tax on your concessional contributions or the amount above $250,000 ā whichever is lesser.
You can withdraw your superannuation when you meet the āconditions of releaseā. The conditions of release say you can claim your super when you reach: