Building Wealth Beyond Super

For many retirees, superannuation is a key component of their retirement plan. With compulsory employer contributions, investment returns, and the power of compounding over time, super can become a significant asset by the time retirement arrives. It also enjoys one of the most tax-effective environments available, making it an ideal vehicle for long-term retirement savings. But what happens if you need access to your money before retirement? What if your financial goals stretch beyond retirement?

This is where building wealth outside of super becomes important. In this blog, we’ll explore why it’s valuable to invest beyond superannuation, how it works, and what to consider when deciding where and how to invest personally.

What Is Superannuation?

Superannuation is a long-term savings system designed to help Australians fund their retirement. Employers are required to contribute a percentage of your income into your super fund (currently 12% in 2025), and you can make voluntary contributions as well. These funds are then invested across a range of assets such as shares, property, infrastructure, and fixed interest.

The key benefits of super investing include:

• Tax advantages: Super contributions and earnings are taxed at a low fixed rate which can be lower than personal marginal tax rates, helping to grow your balance more efficiently

• Automatic contributions: Employer contributions happen regularly, which builds savings steadily over time

• Long-term focus: With access generally restricted until retirement (generally age 60 or later), super encourages disciplined, long-term investing

While these features make superannuation a powerful tool for retirement, they can also be limiting if your financial needs change before you reach preservation age.

Why Consider Investing Outside of Super?

While super is great for retirement, it’s not flexible if you need access before then. We are frequently asked to build strategies for our clients that involve the ability to gradually reduce work as they approach retirement or provide the financial flexibility and freedom to retire when they want and on their terms.

Superannuation is restrictive if you need assets to:

• Fund your children’s education

• Start a business

• Create passive income before retirement

• Maintain access to emergency funds

• Retire before you reach preservative age

For these above goals then you’ll likely need to consider investment outside of super as well.

Building wealth beyond super helps diversify your financial position, provides liquidity, and gives you greater control over how and when you use your money. It can also open up more tailored strategies to suit different life stages and goals.

Common Ways to Invest Beyond Super

There are several popular ways to invest outside of super, each with its own pros and cons:

1. Shares and Managed Funds

Investing in shares or managed funds allows you to build wealth through capital growth and income (dividends or distributions). Shares can be bought and sold in a short turnaround, offering flexibility if you need to access funds.

Benefits:

• Liquidity

• Potential for long-term capital growth

• Can start with small amounts

Considerations:

• Capital gains tax (CGT) may apply when you sell

• Dividends may be taxed at your marginal rate

• Market volatility

2. Investment Property

Owning an investment property can provide rental income and long-term capital growth. It’s often a familiar asset class.

Benefits:

• Tangible asset

• Rental income

• Potential tax deductions

• Ability to leverage into a larger asset

Considerations:

• Large upfront costs (deposit, stamp duty, legal fees)

• Ongoing maintenance and property management

• Property can be illiquid and harder to sell quickly

3. Cash and Term Deposits

Cash investments like high-interest savings accounts and term deposits are low-risk and accessible, often used as a cash bucket or emergency fund for short-term needs.

Benefits:

• Liquidity and security

• Useful for emergency funds

• Reduced capital risk (government guarantee on deposits)

Considerations:

• Limited returns, may not keep pace with inflation

• Interest taxed at your marginal tax rate

Tax Considerations When Investing Personally

Unlike super, which benefits from concessional tax treatment, investing personally means your earnings may be taxed at your marginal tax rate. Here are a few tax aspects to keep in mind:

• Capital Gains Tax (CGT): If you sell an asset like shares or property and make a profit, you may need to pay CGT. However, if the asset is held for more than 12 months, you may be eligible for a 50% CGT discount

• Income Tax: Interest, dividends, and rental income are generally taxed as regular income

Understanding how tax impacts your investments is important in choosing the right ownership structure and strategy.

Structuring Your Investments

Choosing the right investment structure is key when building wealth outside super. Common structures include:

• Individual names: Simple, but income is taxed at the individual’s marginal rate

• Joint ownership: Useful for couples to split income and capital gains

• Trusts: Offers flexibility in distributing income but adds complexity and ongoing costs

Each structure has different tax, legal, and estate planning implications. The best structure depends on your goals, income, and preferences.

Balancing Cashflow and Investment

When investing outside super, balancing day-to-day cashflow is critical. Superannuation contributions are often deducted before you see them, but when investing personally, you’re using after-tax income. It’s important to:

• Budget effectively

• Avoid overcommitting

• Maintain an emergency fund

• Consider automated investing to stay consistent

Start with what you can afford and gradually increase your investment amount over time as your income grows.

Diversification Outside of Super

Diversifying your personal investments means spreading your money across different asset classes, sectors, and geographies. This helps reduce risk and improve long-term outcomes.

Examples of diversification include:

• Combining shares, property, and fixed interest

• Investing across different industries

• Including Australian and international assets

Super funds often do this on your behalf. When investing personally, it’s up to you to build a diversified portfolio or use managed investments to help.

The Benefits of Building Wealth Outside Super

• Flexibility: You control when and how to use your money

• Access: No restrictions like superannuation preservation age

• Goal-driven: Suitable for pre-retirement goals

• Compliments super: Helps create a more complete financial picture

Risks to Keep in Mind

• Market volatility: Investments can fluctuate, especially in the short term

• Tax impacts: Higher tax on investment income compared to super

• Cashflow pressure: Investing personally uses after-tax money

• Lack of structure: Without guidance, investments may not align with your goals

The Role of a Financial Advisor

Building wealth outside of super involves many moving parts including tax, cashflow, investment selection, and structure. A financial advisor helps you bring all of these pieces together.

Advisors can work with you to:

• Clarify your goals and timeframe

• Understand your tolerance for risk

• Choose appropriate investments based on your situation

• Identify tax-effective strategies and structures

• Monitor and adjust your plan over time

While investing outside of super offers flexibility, it also brings complexity. Having someone who understands the rules, market trends, and available options can help simplify the process and give you more confidence in your financial plan.

Key Investment Principles to Remember

Regardless of where you invest, some core investment principles apply:

• Diversification: Spreading your money across different assets can reduce risk and smooths returns over time

• Time in the market: Long-term investing often leads to better results than trying to time the market. Patience and consistency matter

• Compound growth: The earlier you start, the more time your money has to grow

• Regular investing: Small, consistent contributions can build up over time and reduce the impact of market volatility

These principles apply both within and outside of super, and they form the foundation of a sound investment strategy.

Final Thoughts

While superannuation is a strong foundation for retirement, it may not be enough on its own or it may not suit all your financial goals. Investing beyond super allows you to create financial flexibility, access funds when you need them, and work toward goals both before and after retirement.

As with any financial decision, building wealth outside super requires careful planning, a good understanding of your goals, and awareness of the risks involved. By considering your cashflow, tax position, and investment preferences, you can start building a strong financial future today without waiting until retirement.

About Us

After working as an advisor for a decade, Joel founded Unified Wealth.

Unified Wealth specialises in helping clients who are facing life’s big decisions.

Whether you’re contemplating your first property, growing your family or starting your investment journey we can help you focus on the simple steps to help you make your goals reality.

Our priority is making sure you have all the right information available to make the best possible decisions for you and those you love.

Our company values are:

Unity - We are most effective when we work together as a team

Trust - We are trustworthy and act in your best interests

Transparency - We are honest and communicate openly

Education - We are committed to lifelong education

At Unified Wealth our team is highly experienced and provides goal-based advice and solutions for a range of advice strategies.

Speak to our team today.

The information in this blog and the links has been prepared for general information purposes only and does not take into account your personal objectives, financial situation or needs. It is not intended to provide commercial, financial, investment, accounting, tax or legal advice. You should, before you make any decision regarding any information, strategies, or products mentioned in this website, consult a professional financial advisor to consider whether it is suitable and appropriate for you and your personal needs and circumstances. Before making a decision to acquire a financial product, you should obtain and read the Product Disclosure Statement (PDS) relating to that product, together with the Target Market Determination (TMD)