Smarter Super - Invest in your future and make the most of your retirement
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Important Notice

This booklet gives information of a general nature and is not intended to be relied on by readers as advice in any particular matter.

You should consider consulting a financial adviser regarding how this information may apply to your own circumstances.

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While your superannuation balance might seem like a lot of money, once you take inflation into account and consider that your money might need to last 20 or 30 years in retirement, you might be disappointed to find out how much the compulsory 9% employer contributions will provide you to live on.

Some say a target of 65–70% of a person's pre-retirement income is an appropriate retirement income target. But how much money you will need in superannuation will depend on a number of factors such as what sort of standard of living you expect in retirement, what other sources of funds you'll have to draw on, the health and accommodation expenses you will have in retirement, when you retire and how long you live, and how your money is invested and performs in retirement.

If you plan to withdraw your superannuation before you turn 60 years of age, some tax will apply so this also needs to be taken into consideration as it will lower your benefit.


There are many calculators on the Internet that can help you work out whether you are likely to have enough super to fund your retirement dreams. A good place to start is ASIC's retirement planner calculators available on Many super funds also have calculators on their website. You should speak to your financial adviser about your retirement income expectations. You may need to consider making extra contributions.

A financial adviser can help you forecast what sort of superannuation you might need to meet the standard of living you expect in retirement as well as assist you with strategies to achieve this target. Obviously the longer you are in the workforce and having money contributed to super, the greater your retirement savings. And the more money you save now, the more choices and quality of life you will have in retirement.


Under superannuation law, generally you are able to access your super when you reach your ‘preservation age’.

There are some limited circumstances where you might be able to get access to your super before you reach your ‘preservation age’, including severe financial hardship, compassionate grounds, permanent incapacity or death.

There are strict controls on early access. For example, even if your fund's rules allow access on compassionate grounds, the Australian Prudential Regulation Authority must also consider your application. In addition to laws restricting early access, individual super funds have their own rules, so check with your super fund for more information



Watch out for scams involving early release of your superannuation. Avoid dealing with anyone who asks for fees to gain access to your super before the rules allow. The Australian Securities and Investments Commission and the courts impose heavy penalties for anyone who breaks the law in this way.


Nominating your preferred beneficiary or beneficiaries is just as important as having a will. Remember most binding death nominations need to be updated every three years to remain valid. Make sure you update your nomination if your personal circumstances change. For example, you might have children or get divorced.




Funds allow you to nominate your beneficiary with a non-binding nomination. Others offer binding death benefit nominations, which generally must be renewed every three years. If your fund offers binding nominations and you have made a valid one, the fund is compelled to follow your nomination.

A non-binding nomination can’t compel the fund trustee to pay your death benefits in a certain way. While it can help the trustee decide who your death benefit should be paid to, payment is at the trustee’s discretion. The trustee will take into account who would be likely to rely on you financially. Generally, your death benefit – which includes any super money you are entitled to from your fund at the time of your death and any insurance payout as a result of death cover through your super fund – must be paid to your dependants or your estate. If you have no dependants and nobody administering your estate, your fund might be able to consider whether anyone else should receive the benefit. For example, next of kin or any other person with an established close relationship with you. Death benefit payments to non-dependants have to be made as a lump sum.

Under superannuation law, your spouse and children are automatically regarded as dependants. A spouse includes a legally married or de facto spouse. A child includes one born within or outside marriage, an adopted child and may include a stepchild. A dependant can also be any other person who, in the opinion of the trustee, relies on you financially at the time of your death or a person with whom you have an interdependency relationship with. An interdependency relationship is defined as two people (whether or not related by family) who:

  • live together; and
  • have a close personal relationship; and
  • one or each of them provides the other with financial support; and
  • one or each of them provides the other with domestic support and personal care.

An interdependency relationship can also exist where there is a close personal relationship between two people who don't satisfy all other criteria for interdependency because either or both of them suffer from a physical, intellectual, psychiatric or other disability.


Death benefits receive favourable tax treatment depending on who receives the benefit and how it is paid.

Death benefits paid as a lump sum to your dependants are tax free. Taxation on death benefits paid as a reversionary pension to a dependent or paid as a pension to a dependant if the member dies before commencing a pension depends on the age of the primary and reversionary beneficiary.

Death benefits paid to non-dependants could be taxed. For example, a benefit paid to your children who are aged over 18 years and who are not financially dependent on you. In some cases – such as untaxed funds like money from an insurance payout – up to 30% tax could apply. This could considerably erode the amount of inheritance you can pass on.

You should speak to your super fund, tax adviser or financial adviser for information to help you put the right nomination strategy in place to suit your circumstances.


Did you know?

A dependent for tax purposes includes your spouse (including defacto spouse) or former spouse; your children aged under 18 years; a person who is wholly or substantially financially dependent on you at the time of your death; and a person who you were in an ‘interdependency relationship’ at the time of your death.


The law allows the splitting of superannuation in the event of separation or divorce. It would be treated like any other asset if a marriage breakdown occurred that ultimately led to divorce. It’s up to the couple to decide how they would like to divide the funds. If no agreement can be reached, the Family Court will decide how to divide the superannuation, based on circumstances. The law does not cover separating de facto or same sex couples. In the case of this sort of relationship breakdown, these parties would rely on general state property law arrangements.

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