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Why is super important?

After your home, your super is likely to be the second largest asset that you will accumulate throughout your life. It will also play a huge role in determining how you spend your retirement.

  • You will need to have enough money to sustain you throughout your retirement. Today, people have a longer life expectancy than ever before. Depending on your age and health, your super payout may need to last for 20 years or more, so it is important to get started as soon as possible.
  • The standard Government Age Pension is probably not enough to sustain a good standard of living.
  • You will only receive the Age Pension once you have reached the pensionable age of 65 for men and between 60 and 65 for women (this age is currently being adjusted to incorporate an increase). If you plan to retire before this age you will not be eligible for the Age Pension until you reach the required age.
  • As a general rule, for a comfortable retirement, you are likely to need a lump sum of $600,000 at age 65. Are you on track?

What are the tax benefits of super?

There are tax benefits when saving money in a super fund, they are illustrated in the table below:

Salary sacrifice If you choose to add extra funds to your super (above the 9% contributed by your employer) the maximum amount of tax that you will pay on extra contributions is 15% instead of your marginal tax rate.
Co-contributions If you earn less than $61,920 and make additional contributions to your super, the government could match your contribution (up to $1,000).
Additional spouse contributions If your spouse earns less than $13,800 and you contribute to their super you could receive a tax rebate of up to $540. This can be done each year or when taking a lump sum.
Splitting your super with your spouse If you even out the super contributions between yourself and your spouse you may save tax when you convert your super into a pension.
Roll your super over into an allocated pension when you retire If you use your super to buy an allocated pension (income stream) rather than cash it in, you can save tax on the lump sum. The returns on your allocated pension are not taxed.
Access your super while you are still working If you are over 55 and working part time you can access your super in the form of a pre-retirement pension and still contribute to your super.
Pension payments and withdrawals when you are over 60 If you are 60 or over your pension payments and lump sum withdrawals are not subject to tax.

Relevant further information

Important Notice

The advice contained on the Prime Super website does not take into account your particular objectives, needs or financial situation. Before making a decision regarding the acquisition or disposal of a financial product, you should assess whether the advice is appropriate to your objectives, needs or financial situation. You may wish to make this assessment yourself or seek the help of an adviser. Prime Super takes no responsibility for you acting on the information provided. Any decision that you make is at your own risk. Before acquiring a financial product you should obtain a Product Disclosure Statement (PDS) relating to that product and consider the contents of the PDS before making a decision about whether to acquire the product.

Issued by the Trustee: Prime Super Pty Ltd ABN 81 067 241 016 AFSL No. 219723 RSE Licence No. L0000277 Prime Super ABN 60 562 335 823; RN 1000276