What is superannuation?

Superannuation, Retirement PlanningSuperannuation is going to play a big part in your future, so getting to know the basics is very important. 

Superannuation is a way of putting money aside now for your retirement later on in life. Your employer should pay 10% of your salary into a superannuation fund, through the Superannuation Guarantee. Although this is imposed by the government, you can also make smart contributions over the course of your life into your super fund. This is a great way to make an investment in your future and could mean the difference between a modest retirement and a comfortable one.

Superannuation Australia - how it works

As soon as you begin employment, earning $450 or more a month, your employer will start contributing to your super. They are required to pay each employee 10% super in each pay cycle.

The funds put into your super account are then invested, and the growth is reinvested, to assist in growing the balance. Once you retire and no longer receive an income, your superannuation can be accessed as opposed to relying solely on the age pension, to support your lifestyle.

Superannuation structures

The different superannuation structures that we work with include:

As with all financial planning the first step is to determine your financial goals for life. This will often assist with determining which structure is right for your needs.  The next step is the development of an investment strategy.   This investment strategy will document and outline the approach on ‘how’ to achieve your goals.

Superannuation structures

We can assist trustees at any phase of the SMSF Life cycle including:

  • •  Establishment of your SMSF;
  • •  Creation and documentation of your investment strategy;
  • •  Consolidation of your super assets;
  • •  Salary Sacrifice and save tax;
  • •  Transition to Retirement (TTR) Strategies
  • •  Setting up Reserving Strategies to meet your estate and family wealth plans;
  • •  Manage and pass wealth to future generations in a tax effective manner;
  • •  Wind up your SMSF.


The minimum superannuation your employer must pay for each eligible employee is 10% of their ordinary time earnings. This amount is 10% of your income before tax.

You can get your super when you retire and reach your ‘preservation age, which is usually between 55 and 60, depending on when you were born.

The below table outlines when your preservation age is. 

Your date of birth Age you can access your super (preservation age)
Before 1 July 1960 55
1 July 1960 — 30 June 1961 56
1 July 1961 — 30 June 1962 57
1 July 1962 — 30 June 1963 58
1 July 1963 — 30 June 1964 59
After 1 July 1964 60

Your superannuation can be accessed once you reach your preservation age and retire from the workforce.  Your preservation age is between the ages of 55 and 60, depending on your date of birth.

You can also access your super prior to turning 60, however, you may need to pay tax on any payments you receive, regardless of the type of payment you get such as super pension or lump sum. The amount of tax you’ll have to pay depends on whether your payment contains a taxable component, a tax-free component, or a combination of both.

Circumstances that may allow you to access your super early include:

  • •   Incapacity — if you’re unable to work or need to work fewer hours because of a medical condition.
  • •   Severe financial hardship — if you can’t meet your living expenses and have been receiving Commonwealth benefits for 26 weeks.
  • •   Compassionate grounds — to pay for unpaid expenses. These could include medical treatment, modifying your home or vehicle because of a severe disability, funeral expenses, or a loan repayment to prevent you from losing your home.
  • •   Terminal medical condition — if you have a terminal illness or injury.

There are a few ways to claim your superannuation.

These options include:

  1. the DASP online application system – for both super fund and ATO-held super.
  2. a paper form, but you need to use the right form. For super money held by a super fund, use Application for a departing Australia superannuation payment form (NAT 7204) – send this form directly to the super fund.

You can receive your super as a super income stream, super lump sum or a combination of both. The super withdrawal option that you choose may affect the amount of tax you pay and the amount of money you have for your retirement.