Superannuation: Your complete guide

Having enough money for your retirement is just one of the benefits of super. Here are some more:

1. You may pay less tax. 

Super can be an extremely tax-effective form of investing. Your concessional (before-tax) contributions are generally taxed at 15%, which may be lower than your marginal tax rate (depending on your income). You may also get a government co-contribution if you make non-concessional (after-tax) contributions, or a tax offset if you make contributions for your spouse.

Earnings on your accumulation (pre-retirement) super balance are also concessionally taxed at a maximum of 15%. And if you commence an income stream in super after retirement, earnings on that balance are not taxed at all. 

2. Someone else manages your money for you.

Unless you have an SMSF, your super will be managed for you by a professional investment manager according to the investment option you choose. The investment manager may invest in assets that you wouldn’t be able to access as an individual investor. They monitor the markets constantly and adjust the portfolio in line with the investment option’s objectives and parameters.

3. You may have automatic access to insurance with discounted premiums.

Many super funds offer a default level of Death and Total and Permanent Disablement (TPD) insurance to their members. They may also include Salary Continuance Insurance. Unless you want to increase your cover amount, you may receive insurance cover without having to complete any health checks or provide evidence of your health. Super funds negotiate discounts with the insurer, which means you may pay less for your insurance premiums.

4. The government rewards you for adding extra money to your super.

If you’re an employee, have annual income of less than $58,445 (for the 2023-24 financial year), and you make a personal contribution to super that you don’t claim a tax deduction for, you may be eligible to receive a government co-contribution. The government will pay up to $500 per year into your super, depending on your income and the amount of your contribution. 

5. You can withdraw your super tax-free when you retire. 

Once you can access your super (e.g. at retirement), if you are aged 60 or over you can generally withdraw your super tax-free as either a lump sum or an ongoing income stream. You can read more about how super can help you in retirement. 

By law, your employer must contribute some of your pay into a super account for you. This is called the superannuation guarantee. The required amount is 11% of your pay (before tax) for the 2023-24 financial year. 

There are some exceptions, but employers are generally required to pay superannuation guarantee contributions if you're a:

• full-time worker
• part-time worker
• casual worker
• permanent resident, or
• temporary resident.

Each pay day, or on at least a quarterly basis, your employer makes your superannuation guarantee contributions to your super account. Other contributions might also be included if you’re covered by a state award or industrial agreement.

The government is gradually increasing the Super Guarantee percentage over time. From 1 July 2025 it will be 12%. 

You can read more about the different types of super contributions here. 

Topping up your super with an extra contribution – even if it’s only a small amount – can make a big difference over time.

You can add extra money to your super, above your employer’s superannuation guarantee payments, as long as the total amount you contribute within a financial year is below the concessional or non-concessional contributions cap: 

In certain circumstances, you may be able to make a higher amount of concessional or non-concessional contributions in a single year. Learn more here.

Some types of contributions are exempt from the above caps, including downsizer contributions, contributions of certain small business asset sale proceeds, and contributions from certain personal injury payments.

There are restrictions about contributing extra money to your super if you:

• are 75 or older (except for downsizer contributions and compulsory employer contributions such as superannuation guarantee payments)
• have $1.9 million or more in super just before the start of a financial year (your non-concessional contributions cap for the year will be nil if this is the case)
• are aged 67 to 74 and make personal contributions that you want to claim a tax-deduction for (you must satisfy a work test or work test exemption in this situation).

Generally, you’re able to access the money in your super when you:

• turn 65 (even if you haven’t retired)
• reach your preservation age and have permanently retired (except if you start a transition-to-retirement pension), or
• cease a paid work arrangement after reaching age 60 (even if you’re not planning to permanently retire).

Your preservation age depends on your birth date:

You may be able to access some or all of your super early in certain circumstances, including:

• compassionate grounds
• buying your first home (see First Home Super Saver Scheme)
• if you're a temporary resident departing Australia
• if you’re terminally ill, permanently incapacitated, or temporarily incapacitated
• severe financial hardship
• starting a transition-to-retirement pension upon reaching your preservation age.

When an employer makes a contribution on your behalf, or you make a personal contribution that you claim a tax deduction for, it’s taxed at 15% instead of your marginal tax rate. 

If you earn $37,000 or less per year, the government may make a contribution to your super account of up to $500 to offset the tax. 

If your income and concessional (before-tax) contributions are more than $250,000 per year, you may have to pay an additional 15% tax on some or all of these contributions.

When you make personal contributions that you don’t claim a tax deduction for, or your spouse makes a contribution for you, contributions tax doesn’t apply. This is because you or your spouse have already paid income tax on that money. 

Earnings on your accumulation (pre-retirement) super balance are also concessionally taxed at a maximum of 15%. And if you commence an income stream in super after retirement, earnings on that balance are not taxed at all. 

Once you can access your super (e.g. at retirement), if you are aged 60 or over you can generally withdraw your super tax-free as either a lump sum or an ongoing income stream.

A MySuper product is a simple, low-cost product within a super fund. 

If you start a new job and you don’t tell your employer where you want your super contributions to go, they have to check with the ATO to see whether you already have an account set up with a super fund (this is called ‘super stapling’). If you do, your employer has to contribute to that account. If you don’t, they must pay your super into a MySuper product.

A MySuper product will generally invest your money in a diversified or lifecycle investment option. 

The CFS MySuper product is CFS Lifestage. 

Think all super funds are the same? They’re not. That’s why it’s important to compare funds and choose one that’s right for you. Your super is likely to be one of your most valuable assets by the time you retire, so it’s worth taking the time to find a fund that fits your needs.

The ATO’s Super Comparison Tool can be an easy way to weigh up your options, but keep in mind that this only looks at MySuper products. 

Here are some things to keep in mind when comparing super funds: