Super simple: Your guide to superannuation
Superannuation, or “super” for short, is one of the most important parts of your financial future. But for many people, it sits quietly in the background, showing up on payslips and annual statements without much thought.
The truth? Your super could end up being one of your biggest assets, and understanding it now could make a huge difference to your retirement.
What is superannuation?
Superannuation is a long-term investment account designed to help you pay for life after you stop working. While you are working, money goes into your super account where it is invested and hopefully grows over time. Once you retire, you can use that money to fund your lifestyle.
Think of it like this:
- While you are working (and under 60), your super is like a big bucket. Money is poured in through regular contributions and investment returns.
- When you retire, you can turn that bucket into a tap – using the money you have accumulated to provide you with a regular income that you now live off instead of working for your income.
The more you have in your bucket when you retire, the more comfortable your lifestyle can be.
Where does the money come from?
In Australia, employers are legally required to pay at least 12% of your ordinary earnings into your super fund. This is called the Superannuation Guarantee.
But you are not limited to just employer contributions. You can also grow your bucket by:
- Making extra voluntary contributions from your after-tax pay
- Salary sacrificing some of your before-tax pay into super (which can have tax benefits)
- Receiving government co-contributions if you meet the income eligibility rules
How your super can grow over time
Your super fund does not just hold your money– it invests it in a mix of things like shares, property, bonds, and other assets. The aim is to grow your balance over time through a combination of:
- Contributions going in
- Investment returns
- Compounding, where your returns start earning their own returns
The earlier you start paying attention to your super, the more time your money has to grow. Even small extra contributions can add up to thousands more by retirement.
Can you choose your super fund and investments?
Yes. Most Australians can choose their own super fund and even select the type of investment option their money goes into.
Options often range from:
- Conservative – lower risk, lower potential returns
- Balanced – a mix of growth and defensive investments
- Growth or High Growth – higher risk, higher potential returns over the long term
Raiz even offers its own super product, Raiz Invest Super, which lets you manage your investments and super in one place. You can choose from a range of portfolios (or build your own) based on your risk profile, with the same easy-to-use app experience Raiz is known for.
When can you access your super?
Super is meant for retirement, so you generally cannot access it until you reach your preservation age – for most people currently in the workforce, that is over 60 – and you have retired. There are a few other instances where you may be able to access it early but for the most part, its retirement after age 60.
Once you meet those conditions, you can choose how to use your super:
- Take it as a lump sum (a big one-off withdrawal)
- Turn it into a regular income stream (so it replaces your work pay)
- Do a mix of both
Remember the bucket and tap analogy: while you are working, your goal is to fill the bucket as much as possible. When you retire, you turn the tap on and start using that money to live your life.
Why super matters (even if retirement feels far away)
It is easy to ignore super when you are younger because retirement can feel decades away. But super is not just “future you’s problem” – it is a tool you can use right now to build financial freedom later.
By taking a little time now to check:
- How much is in your super
- What investment option you are in
- Whether you could make extra contributions
…you can give yourself a much bigger bucket when it is time to turn on the tap.
Not sure where your superannuation is or if you have multiple accounts? Your MyGov account will have a record of any superannuation funds you may have, and you can also look for ‘lost super’, any accounts that may have lost contact with you. Head to your myGov account, the ATO service link and there you will see a tab ‘Super’.
Superannuation is a system designed to help you invest for your your retirement savings system. It receives contributionsgrows quietly in the background while you work, but it is not set and forget! The more you understand it, and the more you contribute, the more choice and freedom you will have when work is no longer your main source of income.
Think of it as building your future lifestyle fund. Fill your bucket now, so in the future you can turn the tap on and live the life you have worked for.
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Important Information
This blog has been issued by Instreet Investment Limited (ACN 128 813 016 AFSL 434776) as Responsible Entity of the Raiz Invest Australia Fund (ARSN 607 533 022).
Raiz Invest Australia Limited (ABN 26 604 402 815) (Corporate Authorised Representative of Instreet Investment Limited ABN 44 128 813 016, AFSL 434776) is the promoter of Raiz Invest Super, a Division of AMG Super. The Product Disclosure Statement (PDS), Member Guide and Target Market Determination (TMD) are issued by Equity Trustees Superannuation Limited (AFSL 229757, RSE Licence No L0001458) as Trustee of AMG Super.
The information has been prepared without taking into account your objectives, financial situation or needs. Before acting on such information, you should conduct your own review or consult a financial advisor before making a decision to invest. Please read the relevant PDS and any associated reference documents before making an investment decision. In accordance with the Design and Distributions Obligations, we maintain TMDs for our Funds. All documents can be found on the Raiz website www.raizinvest.com.au, or calling the Customer Support team on 1300 754 748. Please note that past performance is not a reliable indicator or guarantee of future performance. Historical returns, forecasts, and market commentary are provided for general informational purposes only. All investment carries risk and may result in loss of capital.
