In essence, superannuation, or super, is a long-term savings plan designed to provide financial support during retirement. It involves regular contributions from your employer, which are invested to accumulate wealth over time. Additionally, you also can add money to your super, and you may qualify for super contributions from the Australian Government. So, what are the key superannuation benefits inherent in this financial vehicle?

1. Tax advantages

Leverage the power of tax efficiency.

Super contributions are subject to concessional tax rates. Head to the Australian Taxation Office (ATO) website to better understand how you might be able to navigate the tax landscape so you can significantly enhance the growth of your super balance.

2. Investment growth

Maximise returns through strategic investments.

Super funds offer a range of investment options — from cash and balanced to aggressive, ethical or more speculative. Understanding these options and choosing a super fund that aligns with your risk tolerance and financial goals can help maximise returns over the long term.

3. Employer contributions

Understand the gift of employer contributions.

Employers are generally required to contribute a percentage of your income to your super fund. At the moment, their contribution rate is set at 11% but it will increase to 12% on July 1, 2025. Knowing how to optimise employer contributions through options such as salary sacrifice or by negotiating a higher salary base to increase your overall contributions is a key element in maximising your superannuation benefits.

4. Salary sacrifice

Boost super through salary sacrifice.

Salary sacrifice allows individuals to contribute a portion of their pre-tax salary to their super. This means that you might pay less income tax as the 15% contributions tax in super might be lower than your individual marginal tax rate, thereby reducing both your taxable income and your tax rate. Uncovering such nuances of salary sacrifice can lead to increased contributions and, subsequently, a larger superannuation balance. The ATO provides a comprehensive guide to salary sacrifice tax implications.

» MORE: Can you salary sacrifice to pay off your mortgage?

5. Government co-contributions

Unlock additional contributions with government co-contributions.

For individuals earning less than $58,445 per year, the government may match personal contributions to the super fund.

As the table below shows, the 2023/24 government co-contribution criteria are based on your earnings and individual superannuation contribution:

Income for the 2023-24 financial year	Your contribution	The maximum you could receive
$43,445	1,000.00	$500
$46,445	$800	$400
$49,445	$600	$300
$52,445	$400	$200
$55,445	$200	$100
$58,445 (or more)	$0	$0

6. Insurance coverage

Protect your future with insurance options.

Many super funds offer default insurance options, providing coverage for life, total and permanent disability, and income protection. Evaluating and optimising these options ensures comprehensive protection in times of personal need, such as temporary illness or permanent work incapacitation.

7. Buying a property

Save for a home deposit with the First Home Saver Scheme (FHSS)

Your super fund allows you to make personal contributions of up to $15,000 each financial year, with a capped total withdrawal limit of $50,000 across all years from July 1, 2017. The scheme allows two individuals to contribute to their respective supers and access their FHSS contributions to acquire the same property. In other words, two individuals purchasing the same property can each access up to $50,000, resulting in a combined potential superannuation withdrawal of $100,000 to buy a home.

There are, however, changes to the scheme coming into effect in 2024, so keep your eye on government announcements.

8. Paying your mortgage

Potentially access super early to put toward your mortgage

You may be eligible for early release of super before preservation age (the age you reach before you can access your super) if you have been diagnosed with a terminal illness if you’re unable to work because of a medical condition, or if you’re experiencing severe financial hardship.

However, it is important to remember that such strategies reduce your future superannuation balances and you may be eligible to make a re-contribution to your fund free of tax.

» MORE: Can I use my super to pay off my mortgage?

9. Preservation of capital

Avoid scams to preserve capital.

Superannuation benefits are generally preserved until retirement. Exploring strategies to preserve and grow this capital ensures a robust financial foundation in your post-work years.

Superannuation funds are a powerful tool on the road to financial security in retirement. However, it is important to be selective and vigilant in managing your retirement investment in line with market performance and expectations. Beware of schemes that advertise early superannuation access. The ATO website can help you identify potential scams and provides key information on early access eligibility.