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Superannuation is one aspect of our finances that, for most of us, gets less attention than it should. This is possibly because superannuation seems more complex than it actually is.

Being a good money manager means periodically assessing your finances and evaluating the short and long-term benefits of your current financial position.

Because your superannuation account holds your retirement savings, it should receive the same scrutiny that you would place on your credit card or home loan.

With a variety of financial products out there, it’s important that you choose your superannuation fund wisely, simply because you can! Just keep in mind that there's more to compare than strong returns and low fees.

How to find the best super fund for you

To determine the best superannuation fund for you, a good starting place is your current fund. When was the last time you examined your quarterly or annual superannuation statement?

When looking at your super statement, or looking for a superannuation fund to invest with, there are some easy items to consider which can help with your decision:

  • Fees: What are the administration and fund management fees? Are there any other super fees, such as investment fees or annual fees? Could you get lower fees with a different super fund?
  • Investment options: Does the fund offer Australian or international shares, cash, bonds, property or a mix of all? What kind of asset allocation is involved?
  • Track record: How long has the fund existed and what investment returns has it recorded for members? Keep in mind that past investment performance is not a reliable indicator of future performance.
  • Insurance: Can you take out life or income protection insurance? Is it more competitive than your current provider?
  • Other services: Does the fund offer additional member services such as financial planning and advice?

These factors can help to narrow down your choices when you're looking for the best super fund based on your needs. 

As well as looking for low fees and positive past performance (which is not a reliable indicator of future performance), you can go even further and compare some of the top RateCity super products based on their ratings. If you compare the badges from SuperRatings, you can get an idea of how some of the top-rated super funds have performed, and which options may be best for your needs.

Using RateCity’s filters, you can further narrow down your superannuation search. For example, you could looks for a fund that suits your super account balance, offers specific investment options, and provides special features and benefits.

It’s important to compare super funds and check the product disclosure statement (PDS) before making any superannuation decisions. You may also want to contact financial advisers to get personal financial advice on which super funds may best suit your financial situation.

What type of superannuation funds are there?

The following list is a snapshot of the type of super funds that exist in Australia (of course, this list is subject to change):

  • Retail funds are usually owned and operated by banks or investment companies. Anyone can join a retail fund.
  • Public sector funds were created for federal, state, and local government employees. Some public-sector funds also accept members who are not public servants.
  • Industry funds generally represent employees from specific industry sectors such as manufacturing or hospitality. Many industry funds also accept members from outside their industry.
  • Corporate funds are privately owned and operated by an employer specifically for its employees. You need to be an employee to be a member of this type of fund.
  • MySuper is a default superannuation account where employers can make contributions on behalf of an employee. This is a no-frills account that does not offer defined benefits.
  • Self-managed funds are controlled by you. Also referred to as SMSF accounts, self-managed funds require a thorough understanding of superannuation and investing to manage.

Some super funds offer a range of different options for investing your superannuation, such as whether you want to invest in high growth assets, or prefer a more balanced option. 

When choosing the best super fund for you, you can decide based on your occupation or industry, or on your preferred investment strategy, or on which funds are more in line with your values. Many superannuation funds represent specific interest groups and advocate for certain principles. For example, you can choose a fund that invests in renewable energy or one that donates a percentage of profits to charity.

How do I change superannuation funds?

Now that you’ve considered whether you want, say, a retail fund run by one of the big banks or a not-for-profit industry fund that gives profits back to members, what's next in your search for the best super fund for you?

Most superannuation funds let you open an account online or over the phone. This step is relatively straightforward, although you will need your tax file number on hand for this process.

Once you’re up and running, you may need to roll over any existing superannuation accounts to the new fund. There are a couple of ways you can do this:

  • Find out if your new super fund will do this for you (in many cases they will)
  • Roll over your existing account/s yourself via the MyGov portal (you will need to have the Australian Taxation Office linked to your profile)

Voila! All done.

What is the superannuation guarantee?

The superannuation guarantee is the term given to compulsory superannuation contributions made by employers to complying superannuation funds.

From 1 July 2014, the federal government stipulated that an employer must contribute 9.5 per cent (as the minimum) of an employee’s wage or salary to their superannuation, although this is scheduled to gradually rise to 12 per cent by 2025.

Super guarantee percentage

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 2015 9.50
1 July 2015 - 30 June 2016 9.50
1 July 2016 - 30 June 2017 9.50
1 July 2017 - 30 June 2018 9.50
1 July 2018 - 30 June 2019 9.50
1 July 2019 - 30 June 2020 9.50
1 July 2020 - 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 12.00
1 July 2026 - 30 June 2027 12.00
1 July 2027 - 30 June 2028 and onwards 12.00

Source: ATO

How much superannuation do I need to retire?

How much super balance you need to retire will depend on what retirement lifestyle you want. If luxury travel is part of your retirement plan, you might need to make extra contributions yourself to achieve this goal.

To help you estimate your retirement’s budget, you can refer to organisations such as the Association of Superannuation Funds of Australia to help with your calculations.

Budgets for various households and living standards (March quarter 2018, national)

  65 year old singles 65 year old couples 85 year old singles 85 year old couples
Modest lifestyle $27,902 $40,380 $26,714 $38,225
Comfortable lifestyle $43,687 $61,909 $42,121 $58,477

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

To determine how much money you’ll have available in your super fund by the time you retire, you can use a government calculator to estimate how much you’ll receive from your employer. If this isn’t enough to afford the retirement lifestyle you’d like, you may want to consider making additional super contributions.

Frequently asked questions

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.

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

How do I set up an SMSF?

Setting up an SMSF takes more work than registering with an ordinary superannuation fund. 

An SMSF is a type of trust, so if you want to create an SMSF, you first have to create a trust.

To create a trust, you will need trustees, who must sign a trustee declaration. You will also need identifiable beneficiaries and assets for the fund – although these can be as little as a few dollars.

You will also need to create a trust deed, which is a document that lays out the rules of your SMSF. The trust deed must be prepared by a qualified professional and signed by all trustees.

To qualify as an Australian superannuation fund, the SMSF must meet these three criteria:

  • The fund must be established in Australia – or at least one of its assets must be located in Australia
  • The central management and control of the fund must ordinarily be in Australia
  • The fund must have active members who are Australian residents and who hold at least 50 per cent of the fund’s assets – or it must have no active members

Once your SMSF is established and all trustees have signed a trustee declaration, you have 60 days to apply for an Australian Business Number (ABN).

When completing the ABN application, you should ask for a tax file number for your fund. You should also ask for the fund to be regulated by the Australian Taxation Office – otherwise it won’t receive tax concessions.

Your next step is to open a bank account in your fund’s name. This account must be kept separated from the accounts held by the trustees and any related employers.

Your SMSF will also need an electronic service address, so it can receive contributions.

Finally, you will need to create an investment strategy, which explains how your fund will invest its money, and an exit strategy, which explains how and why it would ever close.

Please note that you can pay an adviser to set up your SMSF. You might also want to take the Self-Managed Superannuation Fund Trustee Education Program, which is a free program that has been created by CPA Australia and Chartered Accountants Australia & New Zealand.

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 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 salary sacrificing?

A salary sacrifice is where your employer takes part of your pre-tax salary and pays it directly into your superannuation account. Salary sacrifices come out of your pre-tax income, whereas personal contributions come out of your after-tax income.

Is superannuation taxed?

Superannuation is taxed. It 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.

What is MySuper?

MySuper accounts are basic, low-fee accounts. If you don’t nominate a superannuation fund, your employer must choose one for you that offers a MySuper account.

MySuper accounts offer two investment options:

  1. Single diversified investment strategy

Your fund assigns you a risk strategy and investment profile, which remain unchanged throughout your working life.

  1. Lifecycle investment strategy

Your fund assigns you an investment strategy based on your age, and then changes it as you get older. Younger workers are given strategies that emphasise growth assets

What compliance obligations does an SMSF have?

SMSFs must maintain comprehensive records and submit to annual audits.

What happens to my superannuation when I change jobs?

You can keep your superannuation fund for as long as you like, so nothing happens when you change jobs. Please note that some superannuation funds have special features for people who work with certain employers, so these features may no longer be available if you change jobs.

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 much superannuation do I need?

According to the Association of Superannuation Funds of Australia (ASFA), here is how much you would be able to spend per week during retirement:

Lifestyle Singles Couples
Modest $465 $668
Comfortable $837 $1,150

Here is the superannuation balance you would need to fund that level of spending:

Lifestyle Singles Couples
Modest $50,000 $35,000
Comfortable $545,000 $640,000

These figures come from the March 2017 edition of the ASFA Retirement Standard.

The reason people on modest lifestyles need so much less money is because they qualify for a far bigger age pension.

Here is how ASFA defines retirement lifestyles:

Category Comfortable Modest Age pension
Holidays One annual holiday in Australia One or two short breaks in Australia near where you live Shorter breaks or day trips in your own city
Eating out Regularly eat out at restaurants. Good range and quality of food Infrequently eat out at restaurants. Cheaper and less food Only club special meals or inexpensive takeaway
Car Owning a reasonable car Owning an older, less reliable car No car – or, if you do, a struggle to afford the upkeep
Alcohol Bottled wine Casked wine Homebrew beer or no alcohol
Clothing Good clothes Reasonable clothes Basic clothes
Hair Regular haircuts at a good hairdresser Regular haircuts at a basic salon Less frequent haircuts or getting a friend to do it
Leisure A range of regular leisure activities One paid leisure activity, infrequently Free or low-cost leisure activities
Electronics A range of electronic equipment Not much scope to run an air conditioner Less heating in winter
Maintenance Replace kitchen and bathroom over 20 years No budget for home improvements. Can do repairs, but can’t replace kitchen or bathroom No budget to fix home problems like a leaky roof
Insurance Private health insurance Private health insurance No private health insurance

How do you find superannuation?

Lost superannuation refers to savings in an account that you’ve forgotten about. This can happen if you’ve opened several different accounts over the years while moving from job to job.

You can use your MyGov account to see details of all your superannuation accounts, including any you might have forgotten. Alternatively, you can fill in a ‘Searching for lost super’ form and send it to the Australian Taxation Office, which will then search on your behalf.

How do you claim superannuation?

There are three different ways you can claim 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, or 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.

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.

What should I know before getting an SMSF?

Four questions to ask yourself before taking out an SMSF include:

  1. Do I have enough superannuation to justify the higher set-up and running costs?
  2. Am I able to handle complicated compliance obligations?
  3. Am I willing to spend lots of time researching investment options?
  4. Do I have the skill to make big financial decisions?

It’s also worth remembering that ordinary superannuation funds usually offer discounted life insurance and disability insurance. These discounts would no longer be available if you decided to manage your own super.

How much is superannuation in Australia?

Superannuation in Australia 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 ‘superannuation guarantee’, as it is known, has been at 9.5 per cent since the 2014-15 financial year. It 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.

How do I choose the right superannuation fund?

Different superannuation funds charge different fees, offer different insurances, offer different investment options and have different performance histories.

So you need to ask yourself these four questions when comparing superannuation funds:

  • How many fees would I have to pay and what would they cost?
  • What insurances are available and how much would they cost?
  • What investment options does it offer? How would they match my risk profile and financial needs?
  • How have these investment options performed historically?

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.

How do I change my superannuation fund?

Changing superannuation funds is a common and straightforward process. You can do it through your MyGov account or by filling out a rollover form and sending it to your new fund. You’ll also have to provide proof of identity.