Superannuation, or ‘super’, is a way to save money for your future. It is important to understand how much super you’ll need, and how to best manage the money for your retirement.  Through super, you can hold a wide range of investments such as shares, property and cash.

Superannuation is attractive because it receives favourable tax treatment, both when you are working and once you have retired. The government offers these tax savings to encourage you to build your super assets. Employers are obliged to pay superannuation contributions on behalf of their employees. You can also choose to add money into superannuation out of your own pocket. If you are self-employed, you can choose whether to contribute to superannuation.

The tax benefits of superannuation include:

• Personal contributions made to super may attract a tax deduction.
• Contributions made by your employer or under a salary sacrifice arrangement are taxed at only 15% instead of your marginal tax rate which could be higher.
• Investment earnings are taxed at a maximum of 15%, rather than your marginal tax rate which could be up to 46.5%.
• Capital gains in the super fund are taxed at a maximum rate of 15 per cent instead of at your marginal rate if the investments are held by you outside super.
• Your super benefit can be paid as a tax-free pension or lump sum when you reach 60 and satisfy the criteria to access your funds.

Talk to a financial adviser to ensure you are taking full advantage of superannuation benefits.