Superannuation may be the best place to invest for passive income, thanks to the fact that the tax rate is so low compared to individual and company tax rates.
Superannuation investors could have a low tax rate in the accumulation phase and perhaps a 0% tax rate in the retirement phase.
When the income is taxed so little, it means investors' after-tax income can be similar (or identical) to the before-tax income. It's the after-tax income figure that investors should focus on, in my view.
If superannuation investors are after passive income, I think the following ideas are very compelling with $5,000 (or more).
Centuria Industrial REIT (ASX: CIP)
This is a real estate investment trust (REIT) that owns a portfolio of industrial properties across the country. These buildings are located across high-demand areas where vacancy is low.
With tailwinds like e-commerce adoption, refrigerated space, and data centres driving increased demand for industrial demand, this is a strong tailwind for rental income and supporting distributions.
In the first half of FY26, the business reported like-for-like net operating income (NOI) growth of 5.1%, which I think is a solid rate of growth for a REIT. It also noted that its portfolio's rental income potential growth is strong, with an average under-renting of 20% of its real estate, suggesting a big rental increase when the contract comes up for renewal.
The business declared passive income of 16.8 cents per security in FY26, translating into a distribution yield of 5.6%. I think it's a good time to invest while interest rates are higher because that's a headwind for property values – this effect could reverse once interest rates start coming down again.
Plus, it's trading at a large double-digit discount to its net tangible assets (NTA), which was reported as $3.95 per unit as of 31 December 2025.
MFF Capital Investments Ltd (ASX: MFF)
Another ASX share that looks like an excellent passive income buy for superannuation is the listed investment company (LIC) MFF. LICs are a great investment structure because they enable the board to declare the size of dividends they want, allowing for consistent, growing dividends.
MFF has a stated intention to increase dividend payments to investors, which I believe makes it an appealing pick for investors seeking payout stability (and growth).
Companies pay for dividends from the profit they make. MFF generates income by generating investment returns from a portfolio of high-quality international shares with strong economic moats.
If you're going to invest in shares, why not own some of the best contenders that can deliver good compounding earnings, which is a key driver of shareholder returns? Retained investment returns that aren't paid out as dividends can help drive the MFF share price higher over time as the underlying value of the business – measured by the NTA – grows.
MFF intends to pay an annual dividend per share of 21 cents for FY26, translating into a grossed-up dividend yield of 5.8%, including franking credits.
The post How to invest $5,000 for passive income in superannuation? appeared first on The Motley Fool Australia.
Motley Fool contributor Tristan Harrison has positions in Mff Capital Investments. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Mff Capital Investments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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