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TMD

Showing superannuation funds based on investment performance of
and a super balance of
Past 5-year return
9.88

% p.a

FYTD return

2.72

% p.a

Company
Calc fees on 50k

$628

Features
Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
SuperRatings awards
SuperRatings Platinum 2022 MyChoice Super15 Yr Platinum Performance 2007-2022MyChoice Super of the Year Finalist 2022
Go to site

Balanced

More details
Past 5-year return
10.05

% p.a

FYTD return

3.78

% p.a

Company
Calc fees on 50k

$497

Features
Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
SuperRatings awards
SuperRatings Platinum 2022 MySuper7 Yr Platinum Performance 2015-2022Smooth Ride Finalist 2022Infinity Recognised 2022MySuper of the Year Finalist 2022
Go to site

MySuper Lifecycle Growth

More details
Past 5-year return
New

% p.a

0
FYTD return

-

% p.a

Company
Calc fees on 50k

$536

Features
Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
SuperRatings awards
SuperRatings Other 2022 MyChoice Super
Go to site
More details
Past 5-year return
8.32

% p.a

FYTD return

2.04

% p.a

Company
Calc fees on 50k

$405

Features
Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
SuperRatings awards
SuperRatings Platinum 2022 MySuper7 Yr Platinum Performance 2015-2022Smooth Ride 2022MySuper of the Year Finalist 2022
Go to site

Outlook

More details
Past 5-year return
9.93

% p.a

FYTD return

4.12

% p.a

Company
Calc fees on 50k

$492

Features
Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
SuperRatings awards
SuperRatings Platinum 2022 MySuper7 Yr Platinum Performance 2015-2022Smooth Ride Finalist 2022Infinity Recognised 2022
Go to site

Growth (MySuper)

More details
Past 5-year return
9.28

% p.a

FYTD return

2.92

% p.a

Company
Calc fees on 50k

$622

Features
Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
SuperRatings awards
SuperRatings Gold 2022 MyChoice SuperInfinity Award 2022
Go to site

Balanced

More details
Past 5-year return
New

% p.a

FYTD return

1.36

% p.a

Company
Calc fees on 50k

$738

Features
Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
SuperRatings awards
SuperRatings Platinum 2022 MyChoice Super
Go to site
More details
Past 5-year return
New

% p.a

FYTD return

2.59

% p.a

Company
Calc fees on 50k

$643

Features
Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
SuperRatings awards
SuperRatings Platinum 2022 MySuper
Go to site
More details

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Superannuation funds we compare at RateCity

Learn more about superannuation

If you’re considering buying property, you might be wondering if you can use your super money to go towards a deposit or mortgage.

There are strict rules around when you can access your super because it’s intended to provide financial stability during retirement. However, you can make contributions to super as a tax-effective way of saving to buy property.

Saving for a house with the First Home Super Saver Scheme

In the 2017 federal budget, the government introduced the First Home Super Saver Scheme to help first home buyers enter the property market. The scheme is intended to increase the amount of money people can put towards a deposit thanks to the concessional tax rate and the higher rate of earnings through super.

As of 1 July 2017, you can make voluntary contributions into a superannuation account to save for purchasing a first home. As of 1 July 2018, contributions and returns made can be withdrawn at a concessional tax rate to put toward a house deposit.

Most people can salary sacrifice income to make pre-tax contributions to super as part of the First Home Super Saver Scheme. If you’re self-employed or don’t have the option to salary sacrifice, you can still make contributions and claim a tax deduction.

These voluntary contributions are included in the total super contribution cap for each financial year.

Pros and cons of the First Home Super Saver Scheme

For many people, the First Home Super Saver Scheme is a tax-effective way to save for a first home. However, it’s worth going over the positives and negatives.

Pros

  • Tax advantages – Money put into super from pre-tax income or as a voluntary contribution is taxed at a discounted rate, as are earnings generated. Plus, investing in the scheme can reduce your taxable income, and therefore lower the tax you pay on your income.
  • Higher returns – Typically, you will earn more on your investment than you would by putting your money into a savings account.
  • Contributions are made individually – If you’re part of a couple, you can both make contributions to the scheme within separate caps, then withdraw to put toward the one home deposit.

Cons

  • Funds can only be used to buy a property – Once you make contributions to your super, funds can only be withdrawn for the purpose of buying a property. Otherwise, it’ll be locked in your fund until your reach your preservation age.
  • Returns are fixed – The rate of return on contributions within the scheme is fixed. This means if your fund makes a bigger return, the additional money will stay in your account until you retire.
  • You may not have enough for a deposit – Depending on where you live in Australia, the money you’ve saved through the scheme may still not be enough for a deposit on a home – meaning you could also have to dip into other savings.

Can you invest in property through super?

If your super is part of a managed fund, some of your investment mix will typically include investments in property. In these cases, your fund’s trustee is responsible for investing your money. So, while you may be able to choose what percentage of your money you want to go towards property, the investment decision-making ultimately lies with the trustee.

If you have a self-managed super fund (SMSF), you can use your money to borrow and invest directly in property. However, the property has to be deemed as solely providing retirement benefits to fund members (i.e. you). That means it must be purchased as an investment rather than to live in.

Rules for buying property through an SMSF

To buy property through a self-managed super fund, the following rules apply:

  • The property has to be bought for the sole purpose of providing retirement benefits to you
  • You can’t buy the property from a relative or anyone associated with your SMSF
  • The property can’t be lived in by you or anyone associated with your SMSF
  • The property can’t be rented by you or anyone associated with your SMSF

While you can’t buy a property to live in through an SMSF, it is possible to buy a property that you use for business purposes – allowing you to pay rent to your SMSF.

Borrowing money with an SMSF to buy property

Generally, your SMSF can’t borrow money, but there are some exceptions, such as if you need cash to pay a member’s benefit or settle a share transaction. You can also borrow (“gear”) your super into property by investing in managed funds that borrow money.

Borrowing money to buy property using a self-managed super fund happens under strict borrowing conditions called a 'limited-recourse borrowing arrangement'. This arrangement can only be used to purchase a single asset, such as a residential or commercial property.

There are a number of risks to gearing an SMSF, such as higher loan costs, tax losses and the potential for substantial losses to your super. If you’re considering moving to an SMSF or borrowing through an SMSF, talk to a financial professional to make sure you understand the risks and obligations.

Frequently asked questions

Can I buy a house with my superannuation?

First home buyers are the only people who can use their superannuation to buy a property. The federal government has created the First Home Super Saver Scheme to help first home buyers save for a deposit. First home buyers can make voluntary contributions of up to $15,000 per year, and $30,000 in total, to their superannuation account. These contributions are taxed at 15 per cent, along with deemed earnings. Withdrawals are taxed at marginal tax rates minus a tax offset of 30 percentage points.

Voluntary contributions to the First Home Super Saver Scheme are not exempt from the $25,000 annual limit on concessional contributions. So if you pay $15,000 per year into the First Home Super Saver Scheme, you have to make sure that you don’t receive more than $10,000 in superannuation payments from your employer and any salary sacrificing.

Can I transfer money from overseas into my superannuation account?

Yes, you can transfer money from overseas into your superannuation account – under certain conditions. First, you must provide your tax file number to your fund. Second, if you are aged between 65 and 74, you must have worked at least 40 hours within 30 consecutive days in a financial year. (Australians under 65 aren’t subject to a work test; Australians aged 75 and over cannot receive contributions to their superannuation account.)

Money transferred from overseas will generally count to both your concessional contributions limit and your non-concessional contributions limit. You will have to pay income tax on the applicable fund earnings component of any money transferred from overseas. You might also be liable for excess contributions tax.

How do I set up an SMSF?

Setting up an SMSF takes more work than registering with an ordinary superannuation fund. 

An SMSF is a type of trust, so if you want to create an SMSF, you first have to create a trust.

To create a trust, you will need trustees, who must sign a trustee declaration. You will also need identifiable beneficiaries and assets for the fund – although these can be as little as a few dollars.

You will also need to create a trust deed, which is a document that lays out the rules of your SMSF. The trust deed must be prepared by a qualified professional and signed by all trustees.

To qualify as an Australian superannuation fund, the SMSF must meet these three criteria:

  • The fund must be established in Australia – or at least one of its assets must be located in Australia
  • The central management and control of the fund must ordinarily be in Australia
  • The fund must have active members who are Australian residents and who hold at least 50 per cent of the fund’s assets – or it must have no active members

Once your SMSF is established and all trustees have signed a trustee declaration, you have 60 days to apply for an Australian Business Number (ABN).

When completing the ABN application, you should ask for a tax file number for your fund. You should also ask for the fund to be regulated by the Australian Taxation Office – otherwise it won’t receive tax concessions.

Your next step is to open a bank account in your fund’s name. This account must be kept separated from the accounts held by the trustees and any related employers.

Your SMSF will also need an electronic service address, so it can receive contributions.

Finally, you will need to create an investment strategy, which explains how your fund will invest its money, and an exit strategy, which explains how and why it would ever close.

Please note that you can pay an adviser to set up your SMSF. You might also want to take the Self-Managed Superannuation Fund Trustee Education Program, which is a free program that has been created by CPA Australia and Chartered Accountants Australia & New Zealand.

How long after divorce can you claim superannuation?

You or your partner could be forced to surrender part of your superannuation if you divorce, just like with other assets.

You can file a claim for division of property – including superannuation – as soon as you divorce. However, the claim has to be filed within one year of the divorce.

Your superannuation could be affected even if you’re in a de facto relationship – that is, living together as a couple without being officially married.

In that case, the claim has to be filed within two years of the date of separation.

Either way, the first thing to consider is whether you’re a member of a standard, APRA-regulated superannuation fund or if you’re a member of a self-managed superannuation fund (SMSF), because different rules apply.

Standard superannuation funds

If your relationship breaks down, your superannuation savings might be divided by court order or by agreement.

The rules of the superannuation fund will dictate whether this transfer happens immediately, or in the future when the person who has to make the transfer is allowed to access the rest of their superannuation (i.e. at or near retirement).

Click here for more information.

SMSFs

If your relationship breaks down, you must continue to observe the trust deed of your SMSF.

So if you and your partner are both members of the same SMSF, neither party is allowed to use the fund to inflict ‘punishment’ – such as by excluding the other party from the decision-making process or refusing their request to roll their money into another superannuation fund.

This no-punishment rule applies even if the two parties are involved in legal proceedings.

Click here for more information.

Financial consequences

Superannuation funds often charge a fee for splitting accounts after a relationship breakdown.

Splitting superannuation can also impact the size of your total super balance and how your super is taxed.

Click here for more information.

When can I access my superannuation?

You can withdraw your superannuation when you meet the ‘conditions of release’. The conditions of release say you can claim your super when you reach:

  • Age 65
  • Your ‘preservation age’ and retire
  • Your preservation age and begin a ‘transition to retirement’ while still working

The preservation age – which is different to the pension age – is based on date of birth. Here are the six different categories:

Date of birth Preservation age
Before 1 July 1960 55
1 July 1960 – 30 June 1961 56
1 July 1961 – 30 June 1962 57
1 July 1962 – 30 June 1963 58
1 July 1963 – 30 June 1964 59
From 1 July 1964 60

A transition to retirement allows you to continue working while accessing up to 10 per cent of the money in your superannuation account at the start of each financial year.

There are also seven special circumstances under which you can claim your superannuation:

  • Compassionate grounds
  • Severe financial hardship
  • Temporary incapacity
  • Permanent incapacity
  • Superannuation inheritance
  • Superannuation balance under $200
  • Temporary resident departing Australia

 

What is the superannuation rate?

The superannuation rate, or guarantee rate, is the percentage of your salary that your employer must pay into your superannuation fund. The superannuation guarantee has been set at 9.5 per cent since the 2014-15 financial year. It is scheduled to rise to 10.0 per cent in 2021-22, 10.5 per cent in 2022-23, 11.0 per cent in 2023-24, 11.5 per cent in 2024-25 and 12.0 per cent in 2025-26.

What is an SMSF?

An SMSF is a self-managed superannuation fund. SMSFs have to follow the same rules and restrictions as ordinary superannuation funds.

SMSFs allow Australians to directly invest their superannuation, rather than let ordinary funds manage their money for them.

SMSFs are regulated by the Australian Taxation Office (ATO). They can have up to four members. All members must be trustees (or directors if there is a corporate trustee).

Unlike with ordinary funds, SMSF members are responsible for meeting compliance obligations.

What are the risks and challenges of an SMSF?

  • SMSFs have high set-up and running costs
  • They come with complicated compliance obligations
  • It takes a lot of time to research investment options
  • It can be difficult to make such big financial decisions

What should I know before getting an SMSF?

Four questions to ask yourself before taking out an SMSF include:

  1. Do I have enough superannuation to justify the higher set-up and running costs?
  2. Am I able to handle complicated compliance obligations?
  3. Am I willing to spend lots of time researching investment options?
  4. Do I have the skill to make big financial decisions?

It’s also worth remembering that ordinary superannuation funds usually offer discounted life insurance and disability insurance. These discounts would no longer be available if you decided to manage your own super.

What is an SMSF investment strategy?

All SMSFs are required to have an investment strategy, which should explain what assets the fund will buy and what objectives it will pursue. This strategy must be reviewed regularly.

Issues to consider include how much risk the SMSF will take, how easily its assets can be converted into cash and how it will pay out benefits.

What contributions can SMSFs accept?

SMSFs can accept mandated employer contributions from an employer at any time (Funds need an electronic service address to receive the contributions).

However, SMSFs can’t accept contributions from members who don’t have tax file numbers.

Also, they generally can’t accept assets as contributions from members and they generally can’t accept non-mandated contributions for members who are 75 or older.

How are SMSFs allowed to invest their funds?

SMSFs can invest in conventional assets such as shares, term deposits, managed funds and property.

SMSFs can also buy ‘collectibles’ such as artwork, jewellery, antiques, coins, stamps, vintage cars and wine – although there are special rules that apply to collectibles.

Investments must be made on an arm’s length basis, which means that assets must be bought and sold at market prices, while income must reflect the market rate of return.

As a general rule, SMSFs can’t buy assets from members or related parties.

How are SMSFs taxed?

Funds that follow the rules are taxed at the concessional rate of 15 per cent. Funds that don’t follow the rules are taxed at the highest marginal tax rate.

Can I carry on a business in an SMSF?

SMSFs are allowed to carry on a business under two conditions.

First, this must be permitted under the trust deed.

Second, the sole purpose of the business must be to earn retirement benefits.

What compliance obligations does an SMSF have?

SMSFs must maintain comprehensive records and submit to annual audits.

How do I wind up an SMSF?

There are five things you must do if you want to close your SMSF:

  1. Fulfil any obligations listed in the trust deed
  2. Pay out or roll over all the superannuation
  3. Conduct a final audit
  4. Lodge a final annual return
  5. Close the fund’s bank account

What is the age pension's assets test?

The value of your assets affects whether you can qualify for the age pension – and, if so, how much.

The following assets are exempt from the assets test:

  • your principal home and up to two hectares of used land on the same title
  • all Australian superannuation investments from which a pension is not being paid – this exemption is valid until you reach age pension age
  • any property or money left to you in an estate, which you can’t get for up to 12 months
  • a cemetery plot and a prepaid funeral, or up to two funeral bonds, that cost no more than the allowable limit
  • aids for people with disability
  • money from the National Disability Insurance Scheme for people with disability
  • principal home sale proceeds you’ll use to buy another home within 12 months
  • accommodation bonds paid on entry to residential aged care
  • any interest not created by you or your partner
  • a Special Disability Trust if it meets certain requirements
  • your principal home, if you vacate it for up to 12 months
  • granny flat rights where you pay more than the extra allowable amount

For full pensions, reductions apply when your assessable assets exceed these thresholds:

Category

Home owners

Non-home owners

Singles

$253,750

$456,750

Couples living together

$380,500

$583,500

Couples living apart due to ill health

$380,500

$583,500

Couples with only one partner eligible

$380,500

$583,500

For part pensions, reductions apply when your assessable assets exceed these thresholds:

Category

Home owners

Non-home owners

Singles

$550,000

$753,000

Couples living together

$827,000

$1,030,000

Couples living apart due to ill health

$973,000

$1,176,000

Couples with only one partner eligible

$827,000

$1,030,000

For transitional rate pensions, reductions apply when your assessable assets exceed these thresholds:

Category

Home owners

Non-home owners

Singles

$503,250

$706,250

Couples living together

$783,000

$986,000

Couples living apart due to ill health

$879,500

$1,082,500

Couples with only one partner eligible

$783,000

$986,000

How do you open a superannuation account?

Opening a superannuation account is simple. When you start a job, your employer will give you what’s called a ‘superannuation standard choice form’. Here’s what you need to complete the form:

  • The name of your preferred superannuation fund
  • The fund’s address
  • The fund’s Australian business number (ABN)
  • The fund’s superannuation product identification number (SPIN)
  • The fund’s phone number
  • A letter from the fund trustee confirming that the fund is a complying fund; or written evidence from the fund stating it will accept contributions from your new employer; or details about how your employer can make contributions to the fund

You might want to provide your tax file number as well – while it’s not a legal obligation, it will ensure your contributions will be taxed at the (lower) superannuation rate.

How does superannuation affect the age pension?

Most Australians who are of retirement age can qualify for the age pension. However, depending on the size of your assets and post-retirement income, you might be entitled to only a reduced pension. In some instances, you might not be entitled to any pension payments.

Am I entitled to superannuation if I'm a contractor?

As a contractor, you’re entitled to superannuation if:

  • The contract is mainly for your labour
  • You’re over 18 and earn more than $450 before tax in a calendar month
  • You’re under 18, you work more than 30 hours per week and you earn more than $450 before tax in a calendar month

Please note that you’re entitled to superannuation even if you have an Australian business number (ABN).