Looking for a reliable and consistent way to boost retirement savings? Super funds are an excellent option.
Superannuation is a compulsory Australian savings plan. While many people are familiar with the basics of this investment vehicle, not many understand how it works. Here’s a comprehensive guide explaining everything you need to know about super funds:
Who Contributes to a Super Fund?
This is one of the primary questions people have. In Australia, employers are legally obligated to contribute a certain percentage of an employee’s salary into their super account. This is also known as the Superannuation Guarantee (SG).
The contribution percentage has changed many times. As of July 1, 2025, employers must pay a minimum of 12% of their eligible employees’ ordinary time earnings (OTE). Super funds follow a quarterly payment module. Employers must pay superannuation at least four times a year, by the due dates.
Can I Make Additional Contributions?
Yes! In addition to the traditional employer contributions, you can make additional contributions to boost savings. This includes:
- Personal contributions, such as transferring funds from your personal savings account to the super account.
- Government co-contributions. Low- and middle-income earners can apply for this. You can get a maximum of $500 every year.
How Super Funds Invest Your Funds
So, how does your money grow in a super account? Mainly investment. Super funds invest your contributions into various asset classes, including:
- Stocks
- Bonds
- Property
- Infrastructure
Depending on your risk tolerance and future goals, you can choose an investment strategy. Moreover, you can consult with a professional investment manager to make the most out of your contributions.
Accessing Super Funds
Super funds follow a straightforward withdrawal policy. Members can access their funds once they reach a certain retirement age, typically 60-65. You can withdraw it as a lump sum or as periodic payments.
In case of infirmity or a severe medical condition, you can request early access to funds.
Are There Any Fees?
Like other retirement savings accounts, you need to pay a certain fee to manage a super fund. Most funds deduct a monthly fee from the member’s balance.
How Much Super Should I Have?
How much super should I have? Is it enough for retirement? Such questions are completely natural. Retirement planning doesn’t follow a one-size-fits-all approach. The suitable amount of super depends on a number of factors, including:
- Your age
- Retirement goals
- Current lifestyle
- Income replacement
- Inflation
- Investment returns
Benefits of Super Funds
Lastly, here’s a quick glance at the benefits of super funds:
Tax-efficiency – Super fund contributions are taxed at concessional rates. This means you can enjoy tax benefits when you meet the retirement criteria.
Compound growth – Since super funds grow due to investment, you can ensure compound growth. The earlier you contribute, the more financial independence you will have.
Inflation protection – Super funds invest your money in high-earning potential sources, ensuring a diversified portfolio. As a result, there is a high chance your super funds won’t be affected by inflation or constant market fluctuations.