| What is superannuation? | Superannuation, or 'super', is a compulsory system where money is placed in a fund to provide for your retirement. Contributions are made by your employer and, optionally, by you. It is designed to be a long-term savings arrangement to ensure Australians have income in retirement. |
| How much is my employer required to contribute to my superannuation? | Your employer must contribute a minimum of 10.5% of your ordinary time earnings to your superannuation account. This is known as the Superannuation Guarantee (SG) and the rate is scheduled to gradually increase to 12% by July 2025. |
| Can I make extra contributions to my super? | Yes, you can make additional contributions to your super either before tax (concessional contributions) or after tax (non-concessional contributions). There are caps on the amount you can contribute each year without paying extra tax. |
| What are the benefits of contributing to superannuation? | Contributing to superannuation is tax-effective as concessional contributions and investment earnings in super are taxed at a maximum rate of 15%, which is lower than most personal income tax rates. Additionally, contributing extra to your super can significantly increase your savings by retirement. |
| What is an SMSF, and how is it different from other super funds? | A Self-Managed Superannuation Fund (SMSF) is a private super fund that you manage yourself, giving you control over your investment decisions. SMSFs are a good option for those who want more control over their super investments and are willing to take on the responsibilities of managing the fund. |
| Who can be a member of an SMSF? | Generally, up to four people can be members of an SMSF. Each member must be a trustee (or director if there is a corporate trustee), taking an active role in managing the fund. It’s important that all members are committed to the ongoing obligations of running the fund. |
| How do I withdraw my superannuation? | You can start withdrawing from your super once you reach your preservation age and meet a condition of release, such as retiring. The preservation age depends on your date of birth and ranges from 55 to 60 years. |
| What are the risks of an SMSF? | While SMSFs offer greater control over retirement savings, they also require significant time investment, financial knowledge, and strict compliance with super and tax laws. Inappropriate investments or non-compliance can result in substantial penalties. |
