What is Superannuation and how can it benefit you?

By Matt Ireland, Evolution Financial Planning team


Superannuation (or Super) is a mandatory system of saving for retirement. Employers are required to contribute a percentage of your wage or salary into a super fund of your choice, which you will be able to draw upon to support yourself and your family during retirement.

It can be hard to focus on retirement during your working life, and the rules and regulations involved with super often cloud the benefits offered by the system.

One of the main advantages that working Australians can receive from the super system is the ability to pay less tax. The contributions made by your employers are only taxed at a rate of 15%, which is lower than the lowest income tax rate of 19%. You are also able to make your own contributions which allow you to claim a tax deduction and reduce your annual tax bill or potentially increase your annual refund.

Furthermore, any money you earn within your super fund is also taxed at a rate of 15%. This is in comparison to interest in a bank account which is taxed at a minimum of 19%. These factors make super the most effective way to save money for retirement.

 But wait! Your money doesn’t just sit around in super waiting for you to retire…

Your super fund will invest your savings on your behalf into things like shares, property, term deposits and cash. You need to be aware of the different options available to you as some may be more appropriate for you than others. Investments in super can be risky, so it is important to understand and discuss how much risk you are willing to take on.

The aim of super is to put money away as you go about your working life, and watch it grow through the investments that you have chosen. Investing small amounts early on in your life and selecting the right investment option can make an enormous difference on the amount of money you will have in retirement; and may mean you can retire early!


Our team at Evolution can help you navigate the maze that is the super system, even if all you need is to be pointed in the right direction. We can assist with selecting the right super fund, informing you of the risks and helping you to work out how much super is enough.

If you would like to know more about super, the investments involved, or how to maximize your tax savings, give our team a call for an obligation free chat on (02) 4903 1111.

Jane Hextell