If you’re just starting out in the workforce, it pays to learn about superannuation and how you can make the most of it. Keep reading for our top super tips.
We know that retirement seems a long way off, but the sooner you start planning for it, the better off you will be in the future! Many people don’t learn about superannuation until later in life, but implementing some strategies when you start earning wages will reap long-term benefits.
Your employer must contribute 10.5% (at the time of posting Sept 22) of your ordinary earnings to your chosen super fund. Your contributions to superannuation earn investment returns (dividends, interest, etc.) and accumulate throughout your working life. The more you put in, the more you earn as the investment returns compound over time.
Before signing up for a super fund, do some research – your choice could make a huge difference to your retirement and your financial future. Check their fees, investment performance, insurance and financial advice options. The ATO and Canstar have good super comparison tools.
Our top super tips:
- Check your online super account regularly to see that your employer is contributing the superannuation guarantee amount (10.5% at the time of posting September 2022).
- If you are unsure who your super provider is, you can find out by logging into your myGov account or contacting the ATO.
- If you have had a couple of jobs already, you could have a couple of super funds and are more than likely paying multiple account fees. You could consider consolidating your super funds into one account to make your life easier and reduce your fees; however, you should seek financial advice before doing so. To avoid multiple accounts in the future, let your employer know the details of your existing super fund, and they can pay your super into that fund.
- Consider contributing a little extra to your super fund if it won’t cause financial hardship. You can sacrifice earnings from your employer (which reduces your taxable income) or contribute extra from your after-tax earnings.
- If you’re working as a contractor, check whether the business engaging you should be paying your super. If not, get into the habit of contributing at least 10% of your earnings to your super fund. Unfortunately, many sole trader contractors have less super than their employee counterparts, which means less money for retirement.
- You could be eligible for up to $500 of co-contribution from the government – that’s free money to put towards your compounding investment!
Watch your money grow:
If you start learning about superannuation when you first enter the workforce, you’ll be better off in retirement. The sooner you begin to contribute to super, the longer the investment has to compound.
Talk to one of our team about how to make your superannuation work for you.