Superannuation, or “super,” is one of Australia’s cornerstones of retirement planning, but there’s much more to it than the standard employer contributions and fund statements.
Here are some lesser-known facts about super that can help you maximise your retirement savings.
1. You Can Consolidate Your Super Accounts
Many Australians have more than one super account, often due to changing jobs. Multiple accounts can mean paying multiple sets of fees, which can chip away at your retirement savings.
The good news? You can consolidate your super accounts to save on fees and make managing your super easier. The Australian Taxation Office (ATO) has an online tool through myGov that lets you find and combine any lost or unclaimed super accounts with just a few clicks.
2. You May Have Unclaimed Super
If you’ve ever changed jobs or your address, you may have super sitting in an unclaimed account.
Lost or unclaimed super refers to funds the ATO holds for individuals whose accounts have been inactive or underfunded for extended periods.
Checking for unclaimed super through the myGov portal can be a quick way to boost your retirement balance.
3. There’s More Than One Way to Boost Your Super Contributions
While employer contributions are the standard, you can also contribute to your super in a variety of ways, such as salary sacrificing or making voluntary contributions.
Additionally, government co-contributions may be available to eligible low and middle-income earners who make after-tax contributions. This means that if you contribute from your take-home pay, the government might add to it, helping grow your super faster.
4. Super Contributions Are Tax-Effective
Contributing to your super is a tax-effective way to save for retirement. Salary-sacrificed contributions and employer contributions are taxed at a concessional rate of 15%, generally lower than most people’s income tax rate.
This tax benefit can make super an attractive way to save, especially for high-income earners.
5. Super Can Be Accessed Early Under Certain Conditions
Although super is generally locked away until retirement age, it can be accessed early under limited conditions, such as severe financial hardship, specific medical expenses, or a terminal illness diagnosis.
In certain cases, you can also access super if you’re leaving Australia permanently after holding a temporary visa.
6. Super Is Protected in Bankruptcy
One surprising fact about super is that it’s usually protected from creditors if you declare bankruptcy.
Unlike other assets, super balances (up to the preserved level) are generally protected, providing an added financial security layer.
However, this protection doesn’t extend to contributions made to avoid paying debts, so it’s crucial to seek advice if you’re in financial trouble.
Superannuation is more than a retirement fund—it’s a versatile tool with tax advantages and financial security protections. Whether you’re consolidating accounts, maximising contributions, or learning about early access options, understanding the finer points of super can help you make informed decisions and potentially improve your future retirement.
