FAQs

Superannuation in Australia or "super" is a savings system for workplace pensions in retirement. It involves money earned by an employee being placed into an investment fund to be made legally available to fund members upon retirement.

Super simple - A guide to superannuation

Superannuation in Australia started in the early 20th century with the introduction of the "Age Pension" in 1909. However, the modern superannuation system, as we know it today, began in the 1980s. In 1983, the Australian government introduced the "Superannuation Guarantee" (SG) system, which made employer contributions to employees' retirement funds mandatory.

The primary motivation behind introducing superannuation was to address the issue of an aging population and the potential strain on the government's pension system. By encouraging individuals to save for their retirement, the government aimed to reduce reliance on the Age Pension, ensure better financial security for retirees, and create a more sustainable retirement income system. Over the years, the superannuation system has evolved and expanded, becoming a crucial component of Australia's retirement planning and wealth accumulation for millions of workers.

The superannuation rate refers to the percentage of an individual's salary that is contributed to their retirement savings fund in Australia. As of the last update July 1 2023, the compulsory superannuation rate was 11% of an employee's ordinary earnings.

The superannuation rate can change due to government policy decisions. The Australian government has been gradually increasing the compulsory superannuation rate in stages to help individuals build larger retirement savings over time. The plan was to reach a 12% superannuation rate by 2025.

A Unique Superannuation Identifier (USI) is a unique code that identifies a specific superannuation product or fund in Australia. It is used as a reference number for easy identification and tracking of superannuation accounts. 

The USI is typically required when making contributions or rollovers to a superannuation fund and when switching between different funds. Each superannuation fund or product will have its own distinct USI, making it simpler for individuals and employers to manage their superannuation transactions accurately and efficiently.

A Self Managed Super Fund (SMSF) is a type of private super fund that you manage yourself. Unlike other super funds, an SMSF allows the members to be trustees, giving them complete control over how their retirement savings are invested. The trustees can tailor their investment strategies to their personal needs and circumstances. However, they also have the responsibility of complying with the laws and regulations governing superannuation in Australia.

Industry superannuation funds are run to benefit members and are also called profit-for-member funds. When the superannuation guarantee was introduced, industry finds were among the first to emerge and were originally run for a particular industry or trade. 

An Actively Managed Fund is an investment fund where a manager or a management team makes decisions about how to invest the fund's money. They actively select stocks, bonds, or other assets, with the goal of outperforming the market or achieving specific investment objectives. This contrasts with passively managed funds, which simply track a market index. Actively managed funds typically have higher fees than passive funds due to the additional research and active decision-making involved.

Upon retirement, your superannuation becomes accessible. You can choose to withdraw it as a lump sum, convert it into a retirement income stream (like a pension), or a combination of both. The way you choose to access your super will depend on your personal circumstances and financial needs.

The total value of superannuation in Australia is substantial, running into trillions of Australian dollars (over $3 trillion). This amount fluctuates based on various factors, including contributions from employers and individuals, investment returns, and regulatory changes.

At Aus Super Solutions, there is no out-of-pocket expense for getting your super reviewed. Our fees may vary depending on the recommendations for your individual situation and will be discussed with you before making any decisions. Once you decide to go ahead and initiate our advice, our fee is conveniently paid through your super fund - taking away the hassle of having to pay out-of-pocket costs!

Seeking advice related to your financial situation used to come with a price tag before any work or evaluation could start. We believe in helping people, so our services are free of charge until you're completely satisfied with the results and strategy crafted for you. Even if nothing comes out of it, at least you'll learn more about your own superannuation - which is never a bad thing! On top of that, there's always the potential that by following this path you will be able unlock an even brighter future paid solely from money reserved specifically for retirement purposes anyway.

With almost half of the advisors in Australia affiliated with a bank or super fund, it can be difficult to ascertain whether their counsel is truly impartial.

In the past, you might have had to pay a fee before any financial advice could begin. We're different! Our enthusiasm for helping people is so strong that we won't accept money until our clientele are content with their results and strategies. At worst, you'll learn more about your superannuation - which isn't such a bad thing after all! On the other hand, if everything goes well, your future will be brighter than ever…and it's not even coming out of your pocket since retirement funds can never been touched early anyway.

Working over the phone is highly efficient for everyone. Even before COVID-19 we found we can help even more people Australia wide at a lower cost than organising back to back face to face meetings. With our extended working hours and flexibility, everyday Australians that usually wouldn’t have time in the day now have the opportunity to speak with a financial advisor at no cost and with no obligations. We understand this modern approach may not be for everyone however most of our clients find our process simple, easy and convenient.

Analyse: We assess your current superfund, uncover issues and find areas of improvement.

Tailor: Craft a personalised strategy just for you.

Results: Compare, decide and take control. Your future, your way.

- Compare funds - Take advantage of a superannuation comparison website to examine how your fund measures up against the highest-performing funds. Despite the fact that performance may fluctuate from year to year and past performance is not an indication of future results, it's sensible, if possible, to choose a fund with a positive reputation for success and stability.

- Decide - Choose a fund that suits your financial needs

- Check your insurance - Guarantee that you are able to attain a suitable insurance level in the fund of your selection.

- Open an account - When selecting a super fund, don't forget to create an account with them and obtain all the information that your employer would need in order to make contributions. Be sure you are completely satisfied with the insurance level before making any changes!

- Notify your employer - Make sure your employer is aware of where to put in your superannuation payments, as well as how to properly identify you when transferring money into the fund.

- Roll over super to your selected fund - For a more in-depth look, visit the Australian Taxation Office (ATO)'s monitoring of your superannuation page. The easy way to do this is through myGov online - and if you wish to move your balance over to another fund, simply contact them via website or phone!

While industry super funds are a good choice for many, actively managed funds provide a more personalized and dynamic approach to investing, which may better align with specific financial goals and risk tolerance. 

Actively managed funds can offer advantages over industry super funds, such as customized investment strategies, potential for higher returns, greater diversification, responsive management to market changes, and professional expertise. It's wise to research and consult a financial advisor to determine the best option for your needs.

Blog: Actively Managed Fund

Although many Australians don't see their super as a problem, school systems fail to teach us the key elements of choosing an ideal superfund. To narrow down your choices, there are three core aspects you should be aware of: Fees, Returns, Risk.

Superannuation funds come with a variety of fees, such as administration charges, Management Expense Ratios, Indirect Cost Ratios and Insurance Premiums. Unfortunately for most Australians these other costs aren't always visible on their super statement; that's why our experts have made it their mission to break down the additional expenses you might be paying without realising. Join us today and get an accurate picture of all your fund costs!

Returns are ever-evolving and constantly fluctuating, so what may have been a top-performing investment fund in the past could be lagging behind today. Similarly, what might seem like your best option now can quickly become obsolete; that is why it's essential to review your superannuation funds regularly to ensure you remain ahead of the curve and your strategy continues yielding positive performance.

If you had $50,000 of your hard-earned money on the line, you'd know exactly where it was invested. But do you have any idea how much risk and exposure to the markets your superannuation is subjected to? Surprisingly, most Australians are unaware of their superannuation investments. That's why it's important for everyone to understand what their retirement savings are being used for - don't let yourself be one of those who remain in the dark!

By having a review of your superfund, you are able to gain peace of mind in knowing that you're doing the right things with it. In addition, if all goes well and just a small adjustment is made today, then you could very possibly retire sooner or even have more money saved up for retirement. Don't wait any longer--find out now how your superfund works and what can be done to help improve it!

Unless you recognise the fund that you're currently in, it's impossible to give an accurate answer. Nevertheless, bear in mind that it is extremely typical for super funds to only recommend and promote their own products instead of other options available. With hundreds of funds and thousands of investment choices, how can one be assured they are making a wise decision? At Aus Super Solutions we have no direct affiliations with banks or superfunds so our advice will always reflect what truly works best for your needs rather than being motivated by financial gains.

In most instances, seeking advice on your personal financial situation can be expensive with no guarantees of a successful outcome. Not here! We are passionate about helping individuals get the best out of their finances and that's why we don't charge unless you are happy with our results. Even if our services do not end up benefiting you financially, then at least it has enabled you to gain greater insight into your superannuation - which is an invaluable result in itself. However, should things go according to plan there’s always the potential for additional money when retirement comes around.

How much is ‘enough’, is different for every individual. It's essential to recognise that each individual's financial needs and lifestyle  aspirations are unique. 

What constitutes a comfortable living for one person might differ vastly for another. Guidelines can provide a foundational perspective, personalising your retirement planning based on your unique circumstances and aspirations is paramount.

you can see today’s super balance when you sign in to your super account. You can then compare it against the ATO 2021-2022 average super balance for your age group as seen here (blog link above).

Learn more: Blog: How much super should I have?

Blog:How much super should I have?

According to the Association of Superannuation Funds of Australia Limited (ASFA) Retirement standard explainer, for those wanting a ‘comfortable retirement', the average super balance at retirement should be around $690,000 for couples and around $595,000 for singles.

If you've ever changed your name, address or job, it's possible that you may have lost track of some of your super. Your superannuation fund will consider you a 'lost member' and hold your money until they find you.

Read about lost super here - Find Lost Super

With a variety of administration fees, charges and life insurance premiums associated with different super funds, having multiple accounts may lead to paying more than is necessary. Maintaining just one fund means you will only have to pay one set of fees so that your super can grow faster.

Although consolidating your super can be a wise decision, there are numerous additional components that require consideration before you make the move. Factors such as insurance options, risk profiles, fees and fund performance should all be taken into account - otherwise the repercussions could be costly and permanent. Given the abundance of choices out there and how distinct everyone's circumstances are, it is difficult for many people to analyse each option thoroughly and decide what works best for them. Having a professional set up your superannuation accordingly is often much more beneficial than attempting to do it yourself. This advice applies not only when establishing your super but also in other areas that require expertise such as car maintenance or constructing a home. Utilising an expert can help you get the results you want!

In the past, you'd have to pay out of pocket before any financial advice or analysis was given. We are passionate about assisting people, so we won't charge a cent unless you're satisfied with our results and strategies. Even if it doesn't work out in your favour, at least you'll be more knowledgeable when it comes to superannuation which is always beneficial. But on the other hand - best case scenario - through following our plan for a better future, your retirement funds will become significantly greater!

'Super stapling' a superannuation account to an individual employee. This means that when an employee changes jobs, their superannuation fund follows them to the new employer, rather than the employee opening a new superannuation account with each job change. This initiative aims to reduce the creation of multiple superannuation accounts for individuals, which can lead to unnecessary fees and lost retirement savings.

Concessional contributions are payments into your superannuation (retirement fund) taxed at a lower rate, including employer contributions, salary sacrifices, and personal deductible contributions. 

Contribution caps are government-set limits on how much you can contribute to your superannuation each year without extra tax. There are two types: the concessional contribution cap for pre-tax contributions and the non-concessional cap for after-tax contributions. Exceeding these caps can result in additional taxes.

Exploring Contribution Options into Superannuation

Case Study: Boosting your superannuation via salary sacrificing

Salary sacrifice is an arrangement where you agree to forego a portion of your salary to contribute extra to your superannuation. These contributions are made before tax, potentially lowering your taxable income. This can be a tax-effective way to increase your super balance, but it's important to consider contribution limits and personal circumstances.

Superannuation Contributions: Understanding Carry Forward and Bring Forward

The 'carry-forward' rule allows you to make additional concessional (before-tax) contributions to your super if you have not reached your concessional contributions cap in previous years, subject to eligibility. The 'bring-forward' rule lets you make up to three years' worth of non-concessional (after-tax) super contributions in one year without exceeding the non-concessional contributions cap.

Transition to retirement

When you reach your preservation age and retire, you can access your super to fund your retirement.

You can also access your super:

when you turn 65 years old

under the transition to retirement rules (if you are eligible), while you continue to work.

You don't have to cash out your super just because you've reached a certain age. However, you need to check if the rules of your particular super fund specify otherwise.

Yes, under certain conditions:

Severe Financial Hardship: Access is possible if you've been receiving government income support for a specified period.

Compassionate Grounds: For specific personal hardships like medical costs or preventing home foreclosure.

Terminal Medical Condition: With a life expectancy of less than 24 months.

Temporary or Permanent Incapacity: Due to a physical or mental condition affecting work capacity.

First Home Super Saver Scheme: To save for and purchase your first home.

Departing Australia: If you're a temporary resident leaving permanently.