If you’re in your 20s, superannuation probably isn’t something you spend much time thinking about. When you’re starting your career, retirement seems a long way off – and it is. But aside from a house, your super could be the biggest investment you have in your life – and it’s all for future you.
If you’re working, or have worked in the past, you probably have some super. You may even have a few different accounts. Take 10 minutes to make sure you know what’s happening to your money, because your choices now can make a difference to your financial future.
Here are 5 things about super that you should know.
1. Know which super fund you’re with
If you’ve had a few jobs or changed addresses, you might have super in a few different funds. If your employer wasn’t sure where to pay your super they would have paid it into the company’s ‘default fund’ and set you up with an account.
Having more than one super fund isn’t ideal, as you could be paying multiple account fees and insurance premiums. Consider consolidating your super into one account to make it easier to manage and save on multiple admin fees. That extra money could make a big difference to your retirement savings down the track1.
Not sure who you’re with? Don’t worry – find out now
If you’re not sure who your super provider is, you can find out now by logging into your myGov account, or by contacting the Australian Tax Office (ATO) directly. They’ll be able to see if the right amount of money is going into your fund, at the right times.
If you think your employer hasn’t been paying you any super, or the correct amount, you can use the ATO’s Report Unpaid Super Contributions From My Employer tool to let the government know.
To avoid getting multiple accounts in the future, make sure you tell your employers which fund you’re with. It’s easy to take your super with you when you change jobs. Just download a form that tells your employer where to pay your super (PDF) and give it to them, or the accounts team who pay you.
If you find you do have more than one fund, don’t worry, you can easily combine multiple accounts online if you’re an AustralianSuper member.
Choosing the right super fund for you
There are 2 common types of super funds: industry and retail. Industry funds, such as AustralianSuper, pay any investment returns to you – the member. Retail funds tend to charge higher fees, are often run by big banks and pay some profits to shareholders (not just members).
Whatever you choose, it’s important to make sure you’re getting the best deal. Compare your fund and check how much you’ll pay in fees a month, and that it gives you solid investment returns. This money helps your super grow.
The best way to choose is by comparing funds. Look at performance over the long and short-term, because your super could be invested for over 40 years. So a fund that focuses on the long-term, with proven results is important.
2. Make sure you’re being paid super
Whether you’re working full-time, part-time or on a temporary contract, if you’re over 18 years of age and earning more than $450 a month (before tax), then your employer must pay you super. It’s the law.
The government’s Superannuation Guarantee (SG) is the minimum amount of super your employee must pay you. Right now, the SG is 9.5% of your before tax salary, but new legislation says this will rise to 10% in 2021, and a further half a percent (0.5%) each year until it’s 12% in 2025.
To check that you’re being paid super, have a look at your last pay slip. It should be labelled as superannuation, or super. If you’re an AustralianSuper member, you can login to your super account to see what recent contributions have been made to your account, or download the free app.
3. Check that your super fund makes you money – it’s their job
Growing your super is a team effort; you do your bit and your super fund does their bit. Over the next 40 or so years, you’ll work together to get results and set yourself up for retirement.
Your job: Earn money and put money into your super. If you work for an employer, they will make your super contributions for you. If you work for yourself, it’ll be your responsibility. You can also add extra money to your super know as a ‘voluntary contribution’. This helps grow your balance even more – and over the long-term, even a small top-up could make a big difference.
Your fund’s job: Your Fund invests your money into various assets – such as shares, property, and infrastructure. Those investments should make money and provide you with investment returns. This helps the money you put in grow, ready for your retirement.
You can also make money in your account from compound returns. Compounding is like a snowball, once you get some returns into your account, they boost your balance and you earn interest. That interest grows your account and you earn more interest – snowballing over the years.
4. Find any lost super – you could be owed money
Nearly $20.8 billion was left in lost and unclaimed super at the ATO in 2019. If you’ve had more than one job, or have changed your address and contact details, chances are some of it could be yours. It’s always worth checking.
5. Download the app so you can easily check your balance
Super shouldn’t take up too much time in your 20s, but it’s important to check it every few months and make sure your super is being paid. If you’re an AustralianSuper member, you can easily check your balance with our free app.
Not a member? Join today
If you want to join over 2.2 million members at Australia’s leading super fund, you can easily register for an online account today.
1. Before consolidating your super, ask your other super provider about any fees or charges that may apply, and other information about the effect this transfer may have on your benefits, such as insurance cover.
2. On 30 June 2019, ato.gov.au.
This information may be general financial advice which doesn’t take into account your personal objectives, situation or needs. Before making a decision about AustralianSuper, you should think about your financial requirements and refer to the relevant Product Disclosure Statement. AustralianSuper Pty Ltd ABN 94 006 457 987, AFSL 233788, Trustee of AustralianSuper ABN 65 714 394 898.