1. Transferring Money into Superannuation: Contributions

  2. Moving Money into Superannuation: Rollovers

  3. Making Money in Superannuation: Investments

  4. Using Money held in Superannuation

  5. Getting the money out: withdrawals and pensions

  6. Self-Employment and Super




Superannuation, or ‘super’ as it is more often known, is a cornerstone of most people’s personal financial management. Apart from their own home, for many people superannuation comprises their entire personal wealth. It is very important.

Super is basically a form of compulsory saving for employees and a form of tax-advantaged investment for all working people, whether they be employees, self-employed or no longer working.

In this guide, we introduce the basics of superannuation: what super is for, how money gets into super, how it is managed when it gets there, how it can be used both while it is in the fund and when it is paid out. We also include some particular comments about women and super.

This guide also incorporates all of the substantial changes affecting superannuation from 1 July 2017. These changes were mostly announced in the 2016 May Federal budget and have led to substantial changes in how many people make use of super.

Please feel free to send a link to this e-book to any other person who would find it helpful. And, if you would like to discuss your own super situation, please do not hesitate to contact us.

What is super?


Super is a long term savings arrangement designed to assist individuals to accumulate wealth to enable them to fund (at least some of) their own retirement. Becoming self-sufficient reduces people’s reliance on government services such as the age pension.

Many countries use some form of superannuation. Australia’s current system of superannuation took form in 1983, when the then Hawke Labor government reached an ‘Accord’ with trade unions such that the unions agreed to forego direct pay increases in return for the introduction of compulsory super contributions for their members. Initially, employers were obliged to contribute an amount equal to 3% of their employees’ salary or wages into a super fund on that employees’ behalf. At a stroke, all affected workers started to save 3% of their annual income in a savings vehicle which could not be accessed until retirement. Compulsory saving for the future.

The system was expanded in 1992 to cover all Australian employees. This system became known as the ‘Superannuation Guarantee’ and it is still in place today. The introduction of compulsory super came as demographic analysts realised that the Australian population was ageing and this would place a substantial strain on social security benefits paid by the Government (especially the old age pension).

Over the years since, there has been a huge increase in the amount saved into superannuation. The following graph shows the increase in total money saved within superannuation between 1988 and 2012 (source: Parliament of Australia):


Given that employers must make contributions on employee’s behalf, super is effectively forced saving. And given that superannuation benefits cannot generally be accessed until a person retires, super is effectively forced saving for retirement.

Saving for retirement is the predominant purpose of superannuation. But it is not the only one. Superannuation also provides a way for people to finance life insurance during their pre-retirement years.

The Superannuation Guarantee system has had a positive effect – something that is often overlooked as super and its place in public policy is often politicised. But there is evidence to suggest that Australia is comparatively well-placed, in world terms, to cope with the ageing of its population (this ageing is also being experienced in other developed economies).

Put simply, Australia’s superannuation system is undoubtedly one of its economic strengths.

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