Understanding super

Make your super work harder for you

The basics of super

Superannuation is designed to be a tax-effective way to help you save and invest for your retirement.

How does super work?

  • You (and/or your employer) put money into your super account.
  • The super fund invests the money for you and it grows over time (though some years may be negative).
  • The money earned on your investment is also invested and earns a return so your balance grows.
  • You only pay 15% tax on super contributions from your employer (or member contributions for which a tax deduction is claimed) of up to $30,000 a year (this is called the concessional contributions cap). If you’re 50 or over, however, your cap is $35,000 a year. And if your income and certain contributions is more than $300,000 a year, you’ll pay 30% tax on contributions over the cap.
  • The money must be held generally in the fund until you retire, die, or reach a specific age (between 55 and 60 years—depending on your date of birth) after which an income stream or a lump sum benefit is paid.


How much super do I need?

With a comfortable retirement costing, on one estimate, $58,128 a year for a couple, you might not want to rely on just the Age Pension.

In fact, based on the AMP Retirement Adequacy Index (December 2012), more than one in three Australians will not have enough money for their retirement.

To get an idea of how much you might need to retire, read more about how much super do I need? Or to see whether you’re on track, try AMP’s  My super simulator.

Choosing a super fund

Most Australians can choose their own super fund. Even if you change jobs, you should be able to take your fund to your new employer. There are exceptions so ask your employer’s payroll or Human Resources department if you’re not sure.

Our ‘Choosing your super fund’ learning module will help you understand your options for sorting out your super. This includes the type of super funds available and what to look out for when comparing funds.

What is MySuper?

MySuper is a simple default investment option. It is intended by the government to make comparing super products easier based on key differences like cost and investment performance. MySuper authorised means it meets the specific standards set under legislation, including fee structures and generally a basic level of insurance coverage.

If you don’t select an investment option, your contributions will be paid into a MySuper investment option.

Less tax to pay, more money for retirement

Here’s what you get taxed on:

Contributions to your super

Your employer must pay 9.5% of your earnings to super from your pre-tax salary. This is called the Superannuation Guarantee (SG), which will be frozen at 9.5% until 1 July 2021 and then increase by 0.5% a year until it reaches 12% from 1 July 2025.

You pay just 15% tax on all employer contributions up to a limit of $30,000 ($35,000 if you’re 50 or over), and if you have insurance within your super, any premiums are taken out before this 15% is calculated.

What your super earns

A maximum of 15% tax is charged on the earnings of your super fund investments.

Money taken out of super

You can withdraw your super tax-free once you’ve reached the age of 60 and can access your super. And you can even continue to work and access your super with a Transition to Retirement strategy.

Watch our video about the tax benefits of superannuation.

Want to speak to a financial adviser?

Ready to take control of your super?

Find out more

Learn the basics of how an SMSF works

Manage your AMP super

Find out more

Important information

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It’s important to consider your particular circumstances and read the relevant Product Disclosure Statement before deciding what’s right for you. This information hasn’t taken your circumstances into account. 

This information is provided by AMP Life Limited. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relation to products and services provided to you. All information on this website is subject to change without notice.