Ethical investment funds limit themselves to making ‘ethical’ investments (which each fund defines according to its own principles). For example, ethical funds might avoid investing in companies or industries that are linked to human suffering or environmental damage.

SMSFs can invest in conventional assets such as shares, term deposits, managed funds and property.

SMSFs can also buy ‘collectibles’ such as artwork, jewellery, antiques, coins, stamps, vintage cars and wine – although there are special rules that apply to collectibles.

Investments must be made on an arm’s length basis, which means that assets must be bought and sold at market prices, while income must reflect the market rate of return.

As a general rule, SMSFs can’t buy assets from members or related parties.

Superannuation funds can charge a range of fees, including:

• Activity-based fees – for specific, irregular services, such as splitting an account after a divorce
• Administration fees – to cover the cost of managing your account
• Advice fees – for personal investment advice
• Buy/sell spread fees – when you make contributions, switches and withdrawals
• Exit fees – when you close your account
• Investment fees – to cover the cost of managing your investments
• Switching fees – when you choose a new investment option within the same fund

The value of your assets affects whether you can qualify for the age pension – and, if so, how much.

The following assets are exempt from the assets test:

• your principal home and up to two hectares of used land on the same title
• all Australian superannuation investments from which a pension is not being paid – this exemption is valid until you reach age pension age
• any property or money left to you in an estate, which you can’t get for up to 12 months
• a cemetery plot and a prepaid funeral, or up to two funeral bonds, that cost no more than the allowable limit
• aids for people with disability
• money from the National Disability Insurance Scheme for people with disability
• principal home sale proceeds you’ll use to buy another home within 12 months
• accommodation bonds paid on entry to residential aged care
• any interest not created by you or your partner
• a Special Disability Trust if it meets certain requirements
• your principal home, if you vacate it for up to 12 months
• granny flat rights where you pay more than the extra allowable amount

For full pensions, reductions apply when your assessable assets exceed these thresholds:

For part pensions, reductions apply when your assessable assets exceed these thresholds:

For transitional rate pensions, reductions apply when your assessable assets exceed these thresholds:

For employees, there are two types of reportable superannuation contributions:

• Reportable employer super contributions your employer makes for you
• Personal deductible contributions you make for yourself

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.

There is an annual limit of $25,000 for concessional contributions – that is, money paid by your employer and extra money you pay into your account through salary sacrificing. There is also a limit on non-concessional contributions. Australians aged between 65 and 74 have a limit of $100,000 per year. Australians aged under 65 have a limit of $300,000 every three years.

As the Australian Taxation Office explains, there are times when superannuation is paid on overtime and times when it isn’t.

Here is the ATO’s summary:

No, your employer can’t touch the money that is paid into your superannuation account.

Your money will be invested in an investment option of your choosing.

SMSFs are allowed to carry on a business under two conditions.

First, this must be permitted under the trust deed.

Second, the sole purpose of the business must be to earn retirement benefits.

SMSFs must maintain comprehensive records and submit to annual audits.

There are five things you must do if you want to close your SMSF:

1. Fulfil any obligations listed in the trust deed
2. Pay out or roll over all the superannuation
3. Conduct a final audit
4. Lodge a final annual return
5. Close the fund’s bank account

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.

• SMSFs have high set-up and running costs
• They come with complicated compliance obligations
• It takes a lot of time to research investment options
• It can be difficult to make such big financial decisions

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).

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

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

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:

Most funds will allow you to access your superannuation account online. Another option is to manage your superannuation through myGov, which is a government portal through which you can access a range of services, including Medicare, Centrelink, aged care and child support.

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.

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.