One of the best things about Australia's wealth and retirement system is superannuation, which offers lower tax rates compared to someone working full-time. Superannuation is great for passive income, whether that's in retirement or building wealth towards retirement.
Of course, lower tax rates improve net investment returns.
If I were investing $10,000 into superannuation, I'd invest it in businesses that have long-term growth potential but can provide a good dividend yield upfront too. Investing in superannuation should mean we can put the money to work for many years, giving it more time for compounding.
I'll run through some of the businesses that I think could be excellent long-term buys. If an investor had $10,000 to invest (or more), I'd definitely recommend the following ideas.
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Telstra Group Ltd (ASX: TLS)
Telstra is Australia's leading telecommunications business. The country is becoming increasingly digital and this is a strong tailwind for its subscriber numbers and net profit.
Over the last few years, it has managed to juggle both subscriber (including wholesale) growth and average revenue per user (ARPU) growth thanks to price rises and how much subscribers value its network leadership (of coverage and reliability).
In the FY26 half-year result alone, the company delivered a 10.5% hike in its interim dividend to 10.5 cents per share. I think its FY26 grossed-up dividend yield, including franking credits, will come to more than 5.5%.
As the business invests further in 5G, I think it will be able to extend its leadership in the sector.
Wesfarmers Ltd (ASX: WES)
Wesfarmers is a leading retail company with its Bunnings Group and Kmart Group businesses. These two deliver great value for customers, high returns on capital (ROC) for shareholders and manage to continue to find new ways to grow earnings such as category expansion (like pet care and auto products).
I particularly like this business for its passive income in superannuation because of how willing the company is to invest in other sectors to unlock other growth potential. In recent years, examples of that include expansion into lithium mining and healthcare.
The projection on Commsec suggests the business could pay a FY26 grossed-up dividend yield of 4.25%, including franking credits.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
Soul Patts is an investment house that has been listed for more than 120 years, which is invested across a number of sectors like resources, energy, telecommunications, swimming schools, agriculture, building products, industrial property and plenty more.
The business has paid a dividend every year in its listed life and it has grown its annual dividend each year since 1998, which is a great record of reliability.
It regularly invests in new opportunities which could help drive underlying value, and the dividend, higher for many years to come.
I expect it will pay a grossed-up dividend yield of 3.8%, including franking credits. I think it could be a great investment for long-term passive income in superannuation.
