Superannuation – What It Is and How It Works

At Advivo, we believe that understanding how super works will put you in a better position to make the best choice when it comes to super and your retirement. That is why we have decided to make it our focus for November. Since superannuation is a complex topic with countless grey areas, we thought it best to begin the month with a superannuation crash course.

How It Works

Super is money set aside over your Working lifetime to ensure that you have enough funds to live on when you decide to retire. For most people, super begins when you start work and your employer starts paying a portion of your salary into a super fund for you. The current contribution rate is 9.5% of your ordinary earnings.  Your contributions, along with the earnings on those contributions, will build up over the years and when you retire, it is paid to you as either a lump sum, an income stream (like a pension) or a combination of both.

Super and Tax

The tax you pay on your super contributions and your super benefits depends on a range of factors such as your age, the source of your benefit and how your benefit is paid. Before tax super contributions are (concessionally) taxed at 15% whereas the super contributions you make after tax (non-concessional) are not subject to tax.

For more information about super and tax please refer to the ATO website.

Why Is There a Massive Take Up on SMSFs?

Self Managed Superannuation Funds (SMSF) are a popular alternative to traditional superannuation funds. The main reasons for starting up these DIY funds include greater control and flexibility to invest in certain assets.

SMSF are customised wealth creation and succession vehicles that can provide tax-effective income streams to individuals at retirement age. They have a low tax rate of up to 15 per cent, providing strong tax incentives to investors and business owners wanting to take a more active role in preparing for retirement.

While the setup of your self-managed superannuation fund can be quite simple, meeting ongoing compliance and legal requirements would necessitate considerable knowledge and specialist advice. At Advivo, we can provide the specialist advice that will help you effectively manage the compliance costs and move forward.

Our Superannuation Division is agile and flexible because we keep up to date with the constantly changing requirements of Australian superannuation and SMSFs. This means that when providing superannuation advice we’re able to clearly advise on what is best for you and your unique circumstances, both now and in the future.

That said SMSF’s are not for everyone and should only be considered when the fund is of an appropriate size.  If you would like any further information as to whether an SMSF may be of benefit to you, please don’t hesitate to ask us. You can get in touch with us on 07 3226 1800 or you can use our Contact Form to enquire.


The above information on Self Managed Superannuation Funds is general only and is not intended to be taken as advice.  If you require advice regarding your SMSF or setting up an SMSF, please contact Leon Stephan, Advivo’s AFSL Licence holder or your Financial Adviser/AFSL Licence holder.