Super and fund differences

Your super money is invested on your behalf by your superannuation fund. In most cases, you can either choose your superannuation fund or enrol in the fund your employer offers to staff. From 1 November 2021 if you do join a new employer and not make a choice of fund, your employer may use a pre-existing superannuation account, on instruction from the ATO.

There are many benefits of superannuation in Australia, including that any contributions paid into your account are generally taxed at 15 per cent. This means you can potentially reduce the amount of tax you pay by contributing to your account (within the contribution cap limits). It’s important to remember that once the contribution is paid into your account, you can’t access it until you meet a condition of release.

Here are some examples of a condition of release, and when you can access your super:

• You’re 65 years of age.
• You’re over the age of 60 and no longer working.
• You’ve reached preservation age and have retired.

Here’s why you might consider adding to your super:

• You would like to ensure you have enough money in retirement to maintain your lifestyle. 
• You’d like to reduce how much tax you pay by using salary sacrifice contributions.
• You’d like to take advantage of incentives like the Government co-contribution scheme.
• You won’t need to access the money that you invest until retirement.

The Government has put limits in place to ensure that everyone has a fair opportunity to contribute to their superannuation. You can find the current limits via the Australian Taxation Office.

Most of the time, you have the option of choosing what kind of fund you’d like your employer superannuation contributions sent to – but be sure to check with your employer if any restrictions apply.

If you’re unsure what kind of fund will suit you best, reach out to your current super fund (if you have one), or a financial planner. You can also research more on the Money Smart website (https://moneysmart.gov.au/).