Compare Australian superannuation funds

Superannuation industry laws and regulations are complex, but there are three important rules for everyday Australians to remember: 

• Australian employers must pay a percentage of each employee’s pre-tax income into a superannuation fund. Employees can also add more contributions of their own if they so choose.
• This money must stay in the super fund until you reach a certain age and retire – you can’t withdraw your super early except in certain emergency circumstances.
• Retired Australians can access money from their super fund as either a single lump sum or as an income stream to support their lifestyle.

Thinking about your future and setting yourself up for a comfortable retirement is not a common thought for most Aussies starting their first jobs in their teen years. But, the super account you choose matters, and many workers find themselves with one or more default MySuper products opened in their names by employers over the years. 

This is why it can be invaluable to take time out and choose the most competitive superannuation fund for your financial needs and future. Some of the benefits of choosing your own superannuation fund include:

• Industry super funds: You may choose to align your nest egg with a fund within your industry (i.e. hospitality worker choosing a hospitality super fund).
• Avoiding admin fees: As no one can predict the future, one of the best ways to try and get a high investment return is to pick one with the lowest percentage of fees. 
• Investment strategy: Some funds allow you to decide the diversification of your investment portfolio, with options chosen by your super fund, such as a balanced option, growth option or conservative option. You may also opt to decide your own investment strategy via a self-managed super fund (SMSF). 
• Risk level: Choose from lower risk, medium risk and higher risk investment options. The lower risk models may result in lower returns but greater stability over the life of your super. Higher-risk options may result in higher immediate returns, but are subject to market fluctuation. 
• Insurances: Many superannuation funds offer customers life insurances and income protections that are factored into your ongoing fees. You may want to choose a super fund that also has a life insurance policy that best suits your financial situation and household.

Australia’s minimum superannuation contribution is based on the superannuation guarantee, which is presently 10% of your pre-tax income. According to the ATO, you or your employees are eligible for the superannuation contribution if:

• An employee is over 18 and earns $450 or more before tax in a calendar month.
• An employee is under 18 or is a private domestic worker (such as a nanny) and works more than 30 hours per week.

This superannuation guarantee rate is due to increase over the coming years, until it reaches 12.00% in July 2027. 

If you’re self-employed, you aren’t obliged to make minimum superannuation contributions, though depositing money into your super fund can help you prepare for retirement, and may have additional tax benefits.

If you're unsure whether you qualify, or are self-employed and want more information on superannuation contributions, it may be worth speaking to an accountant or financial adviser for personalised financial advice. The Australian Securities & Investments Commission (ASIC) has created the Financial Advisers Registry to help Aussies ensure they're choosing a reputable adviser for their financial services.

To make a superannuation withdrawal in Australia, you need to have reached your “preservation age” and have retired.

Preservation age based on date of birth

There are some exceptional circumstances where you can make an early release from your superannuation fund, before you retire.

According to the ATO, these are some of the conditions of release of super on compassionate grounds:

• "Medical treatment and medical transport for you or your dependant
• Palliative care for you or your dependant
• Making a payment on a home loan or council rates so you don't lose your home
• Accommodating a disability for you or your dependant
• Expenses associated with the death, funeral or burial of your dependant"

If you're struggling financially, you may be able to withdraw some of your super if you meet both these conditions, according to the ATO:

• "You have received eligible government income support payments continuously for 26 weeks; and
• You are not able to meet reasonable and immediate family living expenses."

Keep in mind that if you withdraw super early for reasons of financial hardship, it is taxed as a super lump sum.

The minimum amount you can withdraw is $1,000 and the maximum is $10,000. If your balance is less than $1,000, you may withdraw your remaining balance after tax.

There are other reasons you may be eligible for early release that may or may not fall into the above categories including:

• Financial impacts of the COVID-19/Coronavirus pandemic
• If your superannuation balance is under $200
• To purchase a home through the First Home Super Saver scheme
• To pay for IVF treatments

If you're considering early release of super funds for reasons outside of compassionate and financial necessity, keep in mind you may be setting yourself up for greater financial issues in later years. Any money you take out of your super will not only lower your balance, but lessen your return as superannuation interest is compounded.

In most circumstances you can’t use the money in your superannuation fund to buy a house, though there are exceptions:

• If you retire and access your superannuation as a lump sum, you may be able to use this money to buy a house, or as a deposit on a home loan. Keep in mind that some banks and lenders have maximum age limits on their home loans, as well as income restrictions (e.g. not counting pension income when calculating if you can afford the repayments), so mature Australians may find it more difficult to successfully apply for a mortgage.
• People with a Self-Managed Super Fund (SMSF) may be able to use their superannuation to purchase property, though only as an investment, not as a home for themselves or their friends or family. Money made from this investment property can then be reinvested in the SMSF, further growing their wealth for retirement.
• The First Home Super Saving Scheme (FHSSS) is a government program that lets Australians make extra super contributions into their super fund with the goal of saving a deposit on their first home. You can apply to have a maximum of $15,000 of voluntary contributions per financial year (up to a total of $30,000) released to help pay for a first home deposit.

The amount of money you will need to retire in Australia will depend on the type of lifestyle you hope to enjoy in retirement, as well as whether you hope to make use of the government’s age pension.

The Association of Superannuation Funds of Australia offers the following retirement savings standard guidelines:

Source: Association of Superannuation Funds of Australia - assumes that the retirees own their own home outright and are relatively healthy

Based on these benchmarks, you can estimate how much money you’ll need to have available in your super fund by the time you retire to access the annual income required to pay for the lifestyle you want. If this number isn't where you want it to be, if you're a few years away from retirement you may be able to bolster your retirement income now through salary sacrificing. 

You could also consider selecting a different investment strategy for your super fund, or even switch to a super find that offers improved investment performance (though past performance does not guarantee future performance)

You may be able to supplement your lifestyle with your superannuation funds, any additional income earned from assets, and your pension funds. Keep in mind that your access to your super and other assets may affect your eligibility for an age pension.

Australian citizens who leave the country to move permanently overseas are still subject to the same superannuation rules as other Australians – you still need to wait until you reach retirement age and stop working before you can access the super in your fund.

Temporary Australian residents may be able to take their superannuation with them when they return home by applying for a departing Australia superannuation payment (DASP) after they leave the country – see the ATO for details. 

However, it's important to note that temporary resident super balances are generally taxed upon leaving the country. It is not common to leave with the full superannuation balance you earned in your time here.