14 October 2025
A common question I get asked is who has the best super? Is it Australian Super’s High Growth? AMP or Colonial? or is it a Self-Managed-Super-Fund?
My usual response is to firstly explain how superannuation is NOT a ‘Product’ or an ‘Investment option’ and that it’s a ‘tax structure’ that allows you to invest your retirement money in a highly tax effective way. That is, while you are accumulating funds your superannuation is taxed at a maximum rate of 15% on its investment earnings, which is usually a lot lower than if these investment earnings were earned personally or through some other kind of structure, i.e., a Company or a Trust.
Take for example, your personal income tax which is taxed at rates ranging from 0% all the way to 45%. The more you earn, the higher the rate you pay. If you’re an investor, you would also notice how investment earnings are included in your total income. If you sold an investment any ‘capital gains’ made from the sale are also added, less a 50% discount if you held that investment for longer than 12 months prior to sale.
The key points are to recognise that the rate of tax on your super is generally much lower – which makes it tax effective and that it provides an environment which is designed for long-term investing where investment earnings can compound and grow over time. This tax structure is also separate to you which means that these earnings will not get added to your own personal income resulting in more tax to be paid. In fact, contributing more to super can also reduce your tax but more on this topic later.
Further to this, if you are retired after age 60 or have left employment after age 60, you may have the opportunity to transfer your super to a retirement pension account. This pension tax environment is even more tax effective as investment earnings are taxed at an even lower 0% rate instead of the maximum 15% rate. Within the pension phase, withdrawals and income drawn are also ‘tax free’. So the short story is that provided you can afford not to touch this money, setting aside money and investing in super makes sense.
Disclaimer: Information presented is general in nature and hasn’t taken into account your personal circumstances. You should consider whether the strategies and investments are suitable for you by seeking personal advice from a licensed financial advisor. We do not accept any liability for any resulting loss or damage of the reader or any other person. Past performance is not a reliable guide to future returns.
