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What is super and how does it work?

Superannuation is a type of investment that helps you to self-fund your retirement. Over your working life, your employers will contribute money into a super fund.

The super fund then invests that money on your behalf with the aim of growing your super over time. Once you retire or reach preservation age, you can access your super.

Super aims to offer investment returns that may of previously only been available to the wealthy investors. Super allows everyday people to pool together their money and invest on a large scale.

How super works

Watch this short video that shows how your super works and how super grows.

There are lots of ways to grow your super. The earlier you start, the longer it has to grow and the bigger your savings can get.

[0:01] How super works When you work, some of your salary goes straight into super, where it can grow while you're
working and right through your retirement.
[0:11] Money in super grows because it's invested in things like the share market and property, and the money you
make compounds over time.
[0:20] That means in super, it's not just your investments that make money, the earnings you make on that money also
grow.
[0:28] And the earlier you start, the longer it has to grow and the bigger your savings can get.
[0:35] Super funds charge fees to take care of and help you grow your money.
[0:40] And the more super funds you have, the more fees you pay.
[0:44] So if you want to keep more of it and grow it faster, it might be smart to consolidate or combine all your super
into one account.
[0:53] There are lots of ways to grow your super even faster if you can, like salary sacrifice or after tax contributions.
[1:01] To learn more about ways to grow your super, visit aware.com dot AU/ grow.

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How much does my employer put in my super?

Your employer will contribute a percentage of your pay into a super account in addition to your regular pay. This is called the Superannuation Guarantee (SG) rate and it’s currently 11.5%.

Since 2022, the SG rate has increased in 0.5% increments each year. From 1st July 2025, the SG rate will change to 12%. After this, there are no other planned increases to the SG rate, so we can expect that the rate will hold at 12%.

How does my super grow?

Over your working life, you will be in the accumulation phase. During this phase, your employer will make the standard 11.5% employer contributions, but there are many other ways to grow your super.

Salary sacrifice is when you contribute extra money into your super account from your pre-tax salary. This means you will avoid the income tax rate and pay a concessional tax rate up to a certain limit.1

You can also make contributions from your after-tax pay called personal contributions if you choose.

When can I access my super?

There are a number of conditions for release of your super. For example, if you become injured, sick, disabled to a degree that you can no longer work for an extended period of time. There are other conditions of release, depending on your circumstances.

Generally, most people wait until they reach preservation age, which is when everyone can access their super.

Many people work past their preservation age, so they may continue to work at reduced hours and they can continue to invest their super. It depends on your personal circumstances what you might decide to do.

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1 Before contributing, consider the relevant superannuation thresholds including the current annual limit for all before-tax contributions and after-tax contributions. Exceeding any of these thresholds, may reduce any tax benefits you could receive. For further information see Grow your super.