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.

Find and compare the best Australian super funds

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6.78%

$68

Legalsuper

$628

Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
MyChoice Platinum
More details
5.95%

$78

MLC

$913

Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
MyChoice Platinum
More details
6.97%

$78

MTAA Super

$513

Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
MySuper Platinum
More details
6.63%

$92

smartMonday

$622

Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
MyChoice Platinum
More details
New

$575

BT Financial Group

$1.2k

Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
MyChoice Gold
More details
6.23%

$180

IOOF

$1.1k

Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
MyChoice Gold
More details
-

$0

HUB24 Limited

$452

Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
MyChoice Gold
More details
4.85%

$91

AMP Bank

$701

Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
MyChoice Gold
More details
5.79%

$0

Energy Industries Superannuation Scheme

$475

Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
MySuper Gold
More details
6.44%

$0

Electricity Industry Superannuation Scheme

$365

Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
MyChoice Gold
More details
New

$117

First Super

$597

Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
MyChoice Gold
More details

Learn more about superannuation

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 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?

What happens to my insurance cover if I change superannuation funds?

Some superannuation funds will allow you to transfer your insurance cover, without interruption, if you switch. However, others won’t. So it’s important you check before changing funds.

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 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 I combine several superannuation accounts into one account?

The process used to consolidate several superannuation accounts into one is the same process used to change superannuation funds. This can be done through your MyGov account or by filling out a rollover form and sending it to your chosen fund.

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 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 superannuation?

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

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.

What are government co-contributions?

A government co-contribution is a bonus payment from the federal government into your superannuation account – but it comes with conditions. First, the government will only make a co-contribution if you make a personal contribution. Second, the government will only contribute a maximum of $500. Third, the government will only make co-contributions for people on low and medium incomes. The Australian Taxation Office will calculation whether you’re entitled to a government co-contribution when you lodge your tax return. The size of any co-contribution depends on the size of your personal contribution and income.

When did superannuation start?

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.

What happens if my employer falls behind on my superannuation payments?

The Australian Taxation Office will investigate if your employer falls behind on your superannuation payments or doesn’t pay at all. You can report your employer with this online tool.

How do you calculate superannuation?

Superannuation is calculated at the rate of 9.5 per cent of your gross salary and wages. So if you had a salary of $50,000, your superannuation would be 9.5 per cent of that, or $4,750. This would be paid on top 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.

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.

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

How much superannuation should I have?

The amount of superannuation you need to have at retirement is based on how much money you would expect to spend each week during your retirement. That, in turn, depends on whether you expect to lead a modest retirement or a comfortable retirement.

The Association of Superannuation Funds of Australia (ASFA) estimates you would need the following amount per week:

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 calculate superannuation from a total package?

Superannuation is calculated at the rate of 9.5 per cent of your ‘ordinary-time earnings’. (For most people, ordinary-time earnings are their gross annual salary or wages.) So if you had a salary of $50,000, your superannuation would be 9.5 per cent of that, or $4,750. This would be paid on top of your salary.

As the Australian Taxation Office explains, some items are excluded from ordinary-time earnings. They include:

  • Overtime work paid at overtime rates
  • Expense allowances that are fully expended
  • Expenses that are reimbursed
  • Unfair dismissal payments
  • Workers’ compensation payments
  • Parental leave
  • Jury duty
  • Defence reserve service
  • Unused annual leave when employment is terminated
  • Unused long service leave when employment is terminated
  • Unused sick leave when employment is terminated

Although the superannuation guarantee is currently at 9.5 per cent, 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.

What is the superannuation rate?

The superannuation rate, or guarantee rate, is the percentage of your salary that your employer must pay into your superannuation fund. The superannuation guarantee has been set 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.