What is superannuation

Superannuation is your money set aside for your retirement. Your super fund invests your money to help it grow over time.

Generally, you can’t use your super until you retire. But the choices you make today – like how your money is invested and how much you pay in fees – can make a big difference to your balance. 

How super works

Most people who work in Australia receive super contributions from their employer. The contributions go into your super account and your super fund invests that money for you.

Here are five quick facts about superannuation:

1. If you’re over 18 and working, your employer must pay super for you. If you are under 18, your employer must pay super if you work more than 30 hours a week.
2. Super is paid at 12% of your ordinary time earnings. Some employers pay more.
3. You can start using your super at age 60 (if you leave work/retire) or age 65 (whether you’re still working or not).
4. Super is taxed at a lower rate than most people pay outside super. That helps your money grow faster.
5. Your super balance can include:

• • money your employer puts in
  • other money you put in yourself
  • growth from investment earnings

What is a super fund?

Super funds invest your money to help it grow.

You can usually choose your own fund. If you don’t, your employer will choose one for you. Find out more about choosing a super fund.

You can also choose what the money gets invested in. If you don't choose, the super fund will automatically choose for you. 

If you change jobs, you can use your existing super account or open up a new account with another fund.

If you have more than one super account

If you’ve worked in different jobs, you can end up with more than one super account. Combining your super into one account can make it easier to manage and might save you money on fees and insurance costs. Before you do that though, check to make sure you won’t lose insurance that you want to keep.
You can check how many super accounts you have and combine super into one account for free through the ATO at myGov.

Find out more about how to find the accounts that you have and combine your super into one account.

Choose what to invest your super in

Most super funds offer different investment options for you to choose from. Your super fund will automatically choose how your money is invested, but you can choose to change that if you want. Different options come with different levels of risk and potential return:

• Growth options aim for higher returns by investing more in shares but carry a higher risk of losses in bad years.
• Balanced options spread investments across different types of assets to aim for moderate returns and a more moderate risk of losses.
• Conservative options focus on preserving your balance by reducing the risk of losses but usually offer lower returns.

Consider insurance through super

Most super funds offer life, total and permanent disability (TPD) and income protection insurance. The insurance pays your beneficiaries of you die and/or pays you if you're unable to work.

You can choose whether or not to have insurance. The cost depends on the type of insurance you choose, as well as things like how much you’re insured for, your age, and occupation. Your super fund deducts the cost of insurance from your super balance.

Find out more about insurance in super.

Your super to-do list

The super choices you make now can make a big difference to your future. So, make sure you:

• Know where your super is, and how many accounts you have.
• Check your payslip and super statement regularly to make sure your employer is making contributions.
• Review your investment returns and fees to see how your super is tracking and whether changes could help. You can use the ATO's YourSuper comparison tool to compare your fund’s performance.
• Check your insurance to make sure it’s right for you.
• Keep your personal details (like address and email) updated with your super fund so they don’t lose touch with you.