How to invest in superannuation?

How do you invest in superannuation?

You invest into super by contributing money into a superannuation fund. There is a wide range of superannuation funds to suit different requirements and arrangements. The most common types of funds are:

  • Employer funds or corporate super plans.
  • Industry funds, including those catering for a particular industry, such as the building industry.
  • Personal funds. These funds are separate from an employer or industry fund and are run by a fund manager. Personal funds are those you have independently chosen to invest in.
  • DIY super funds, otherwise known as self-managed super funds. These funds are set up by an individual or a group of less than five people.

Types of superannuation accounts

Within a superannuation fund, you have your own superannuation account. There are two basic kinds of superannuation accounts. The type of account determines how much money you will have in super at retirement.

Types of super accounts

  • Your retirement benefit depends on how much you contribute and how much it grows or "accumulates" over your working life.
  • Your retirement benefit is equal to the amount of money you paid in plus investment earnings less expenses and fees.

Defined benefit

  • Your retirement benefit is defined by a set formula of which you are made aware when you join.
  • The formula may take into account your annual salary, your length of service and your age at retirement, and can differ from fund to fund.
  • Defined benefit funds are common in the public sector. They are also used by some large companies.

The information in this document reflects our understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way.

All information and advice is for the private use of the person to whom it is provided. Freedom Financial Planning Authorised Representative provides you with advisory services in accordance with the disclosures in the Financial Services Guide.

Freedom Financial Planning Pty Ltd ACN 105 923 117 is an Authorised Representative of Consultum Financial Advisers Pty Ltd, ABN 65 006 373 995, an Australian Financial Services Licensee with its registered office at Level 6, 161 Collins Street, Melbourne VIC 3000

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