Australia’s superannuation system is designed to help people save money to prepare for retirement. By putting money aside over the course of their careers, Australians can be more confident that they’ll have the financial security in retirement to enjoy a more comfortable lifestyle, with or without an age pension.

Australians have a wide range of superannuation options to choose from, including default super funds and self-managed super funds, all managed by a diverse array of superannuation companies. Different super options have different superannuation rates, investment options, fees, features and benefits. The best super option for you may depend on a range of factors, from your income and financial situation to your future retirement plans.

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6.14%

$78

MTAA Super

$443

Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
MyChoice Platinum
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5.40%

$92

smartMonday

$622

Advisory services
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Online access
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MyChoice Platinum
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5.65%

$68

Legalsuper

$628

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MyChoice Platinum
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4.87%

$78

MLC

$913

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MyChoice Platinum
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4.16%

$175

Netwealth

$748

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MyChoice Gold
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5.49%

$91

AMP Bank

$521

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MyChoice Gold
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5.18%

$0

OnePath

$425

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Variety of options
MyChoice Gold
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4.16%

$78

Australian Catholic Superannuation & Retirement Fund

$583

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Variety of options
MyChoice Gold
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$500

HUB24 Limited

$599

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MyChoice Gold
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4.39%

$86

REI Super

$601

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MyChoice Gold
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-

$60

AvSuper

$630

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MyChoice Gold
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4.43%

$78

Russell Investments

$368

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Variety of options
MyChoice Gold
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New

$73

WA Super

$513

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Income protection
Online access
Term deposits
Variety of options
MySuper Gold
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New

$575

BT Financial Group

$1.2k

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MyChoice Gold
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Learn more about superannuation

What are Australia’s superannuation rules?

Superannuation 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.

What is the minimum superannuation contribution in Australia?

Australia’s minimum superannuation contribution is based on the superannuation guarantee, which is presently 9.5% of your pre-tax income. According to the ATO, you or your employees are eligible for the superannuation contribution if:

  • An employee 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 rate is due to increase over the coming years to around 12.00%. 

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.

What are the benefits of superannuation funds?

Thinking about the 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 multiple funds 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 aligning 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. 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.

When can you access your superannuation in Australia?

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

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.gov.

Depending on your circumstances, you can choose to withdraw your superannuation all at once as a lump sum, regularly withdraw small amounts as an income stream, or split the difference by doing both (withdrawing part of your super balance as a lump sum and using the remainder as an income stream).

Depending on your financial circumstances, the amount of super you withdraw and use may affect your ability to receive an age pension from the government.

Can I withdraw my super early in Australia?

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 compassion 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 COVID-19/Coronavirus 
  • 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.

Can you take your super if you leave Australia?

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.

Can you use your super to purchase a house?

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 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.

How much super do you need to retire in Australia?

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 the government’s age pension.

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

  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/

Based on these standards, 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 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.

Frequently asked questions

How do you access superannuation?

Accessing your superannuation is a simple administrative procedure – you just ask your fund to pay it. You can access your superannuation in three different ways:

  • Lump sum
  • Account-based pension
  • Part lump sum and part account-based pension

However, please note that your superannuation fund will only be able to make a payout if you meet the ‘conditions of release’. The conditions of release say you can claim your super when you reach:

  • Age 65
  • Your ‘preservation age’ and retire
  • Your preservation age and begin a ‘transition to retirement’ while still working

The preservation age has six different categories:

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

There are also seven special circumstances under which you can claim your superannuation:

  • Compassionate grounds
  • Severe financial hardship
  • Temporary incapacity
  • Permanent incapacity
  • Superannuation inheritance
  • Superannuation balance under $200
  • Temporary resident departing Australia

When can I access my superannuation?

You can withdraw your superannuation when you meet the ‘conditions of release’. The conditions of release say you can claim your super when you reach:

  • Age 65
  • Your ‘preservation age’ and retire
  • Your preservation age and begin a ‘transition to retirement’ while still working

The preservation age – which is different to the pension age – is based on date of birth. Here are the six different categories:

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

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:

  • Compassionate grounds
  • Severe financial hardship
  • Temporary incapacity
  • Permanent incapacity
  • Superannuation inheritance
  • Superannuation balance under $200
  • Temporary resident departing Australia

 

Can I take money out of my superannuation fund?

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:

  • Age 65
  • Your ‘preservation age’ and retire
  • Your preservation age and begin a ‘transition to retirement’ while still working

That said, you can take money out of your superannuation fund early based on one of these seven special conditions:

  • Compassionate grounds
  • Severe financial hardship
  • Temporary incapacity
  • Permanent incapacity
  • Superannuation inheritance
  • Superannuation balance under $200
  • Temporary resident departing Australia

How long after divorce can you claim 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 – including superannuation – 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 you’re in a de facto relationship – 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 you’re a member of a standard, APRA-regulated superannuation fund or if you’re 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).

Click here for more information.

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 ‘punishment’ – 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.

Click here for more information.

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.

Click here for more information.

What is a superannuation fund?

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
  • Industry funds
  • Public sector funds
  • Corporate funds
  • Self-managed super funds

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.

What is superannuation?

Superannuation is money set aside for your retirement. This money is automatically paid into your superannuation fund by your employer.

Can I buy a house with my superannuation?

First home buyers are the only people who can use their superannuation to buy a property. The federal government has created the First Home Super Saver Scheme to help first home buyers save for a deposit. First home buyers can make voluntary contributions of up to $15,000 per year, and $30,000 in total, to their superannuation account. These contributions are taxed at 15 per cent, along with deemed earnings. Withdrawals are taxed at marginal tax rates minus a tax offset of 30 percentage points.

Voluntary contributions to the First Home Super Saver Scheme are not exempt from the $25,000 annual limit on concessional contributions. So if you pay $15,000 per year into the First Home Super Saver Scheme, you have to make sure that you don’t receive more than $10,000 in superannuation payments from your employer and any salary sacrificing.

What age can I withdraw my superannuation?

You can withdraw your superannuation (or at least some of it) when you reach ‘preservation age’. The preservation age is based on date of birth. Here are the six different categories:

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

When you reach preservation age, you can withdraw all your superannuation if you’re retired. If you’re still working, you can begin a ‘transition to retirement’, 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.

How do you open a superannuation account?

Opening a superannuation account is simple. When you start a job, your employer will give you what’s called a ‘superannuation standard choice form’. Here’s what you need to complete the form:

  • The name of your preferred superannuation fund
  • The fund’s address
  • The fund’s Australian business number (ABN)
  • The fund’s superannuation product identification number (SPIN)
  • The fund’s phone number
  • A letter from the fund trustee confirming that the fund is a complying fund; or written evidence from the fund stating it will accept contributions from your new employer; or details about how your employer can make contributions to the fund

You might want to provide your tax file number as well – while it’s not a legal obligation, it will ensure your contributions will be taxed at the (lower) superannuation rate.

How do you create a superannuation account?

Before you create a superannuation account, you’ll need to check if you’re allowed to choose your own fund. Most Australians can, but this option doesn’t apply to some workers who are covered by industrial agreements or who are members of defined benefits funds.

Assuming you are able to choose your own fund, the next step should be research, because there are more than 200 different superannuation funds in Australia.

Once you’ve decided on your preferred superannuation fund, head to that provider’s website, where you should be able to fill in an online application or download the appropriate forms. You’ll need your tax file number (assuming you don’t want to be charged a higher tax rate), your contact details and your employer’s details (if you’re employed).

How do you set up superannuation?

Before you set up a superannuation account, you’ll need to check if you’re allowed to choose your own fund. Most Australians can, but this option doesn’t apply to some workers who are covered by industrial agreements or who are members of defined benefits funds.

Assuming you are able to choose your own fund, the next step should be research, because there are more than 200 different superannuation funds in Australia.

Once you’ve decided on your preferred superannuation fund, head to that provider’s website, where you should be able to fill in an online application or download the appropriate forms. You’ll need your tax file number (assuming you don’t want to be charged a higher tax rate), your contact details and your employer’s details (if you’re employed).

How many superannuation funds are there?

There are more than 200 different superannuation funds.

Can I choose a superannuation fund or does my employer choose one for me?

Most people can choose their own superannuation fund. However, you might not have this option if you are a member of certain defined benefit funds or covered by certain industrial agreements. If you don’t choose a superannuation fund, your employer will choose one for you.

What is an SMSF?

An SMSF is a self-managed superannuation fund. SMSFs have to follow the same rules and restrictions as ordinary superannuation funds.

SMSFs allow Australians to directly invest their superannuation, rather than let ordinary funds manage their money for them.

SMSFs are regulated by the Australian Taxation Office (ATO). They can have up to four members. All members must be trustees (or directors if there is a corporate trustee).

Unlike with ordinary funds, SMSF members are responsible for meeting compliance obligations.

What superannuation details do I give to my employer?

When you start a job, your employer will give you what’s called a ‘superannuation standard choice form’. Here’s what you need to complete the form:

  • The name of your preferred superannuation fund
  • The fund’s address
  • The fund’s Australian business number (ABN)
  • The fund’s superannuation product identification number (SPIN)
  • The fund’s phone number
  • A letter from the fund trustee confirming that the fund is a complying fund; or written evidence from the fund stating it will accept contributions from your new employer; or details about how your employer can make contributions to the fund

You should also provide your tax file number – while it’s not a legal obligation, it will ensure your contributions will be taxed at the (lower) superannuation rate.

How does superannuation work?

Superannuation is paid by employers to employees, at least once every three months. The ‘superannuation guarantee’ is currently 9.5 per cent – 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 – whichever is lesser.

You can withdraw your superannuation when you meet the ‘conditions of release’. The conditions of release say you can claim your super when you reach:

  • Age 65
  • Your ‘preservation age’ and retire
  • Your preservation age and begin a ‘transition to retirement’ while still working

 

Can I transfer money from overseas into my superannuation account?

Yes, you can transfer money from overseas into your superannuation account – under certain conditions. First, you must provide your tax file number to your fund. Second, if you are aged between 65 and 74, you must have worked at least 40 hours within 30 consecutive days in a financial year. (Australians under 65 aren’t subject to a work test; Australians aged 75 and over cannot receive contributions to their superannuation account.)

Money transferred from overseas will generally count to both your concessional contributions limit and your non-concessional contributions limit. You will have to pay income tax on the applicable fund earnings component of any money transferred from overseas. You might also be liable for excess contributions tax.

How can I withdraw my superannuation?

There are three different ways you can withdraw your superannuation:

  • Lump sum
  • Account-based pension
  • Part lump sum and part account-based pension

Two rules apply if you choose to receive an account-based pension (also known as an income stream):

  • You must receive payments at least once per year
  • You must withdraw a minimum amount per year
    • Age 55-64 = 4%
    • Age 65-74 = 5%
    • Age 75-79 = 6%
    • Age 80-84 = 7%
    • Age 85-89 = 9%
    • Age 90-94 = 11%
    • Age 95+ = 14%

If you want to work out how long your account-based pension might last, click here to access ASIC’s account-based pension calculator.

When did superannuation start in Australia?

Australia’s modern superannuation system – in which employers make compulsory contributions to their employees – started in 1992. However, before that, there were various restricted superannuation schemes applying to certain employees in certain industries. The very first superannuation scheme was introduced in the 19th century.

Is superannuation included in taxable income?

Superannuation is not included when calculating your income tax. So if you have a salary of $50,000, your assessable income would be $50,000, not $50,000 plus superannuation.

That said, superannuation itself is taxed. It is generally taxed at 15 per cent, although if you earn less than $37,000, you will be reimbursed up to $500 of the tax you paid.