Teaching children about super

16 May 2023 

Saving for the future is all about making good choices – the earlier the better. You can set your kids up for success by arming them with superannuation knowledge today. And don’t worry, you don’t have to be an expert. Having experience with super means you can share the basics.  

Research commissioned by the Australian Taxation Office (ATO) found that 9 out of 10 Australian parents think super education is important – but 1 in 5 don’t feel confident explaining super¹.

To get started teaching your children about super, here are some pointers on what terms and concepts to share with them.

On this page:

• What is super?
• Who is eligible for the super guarantee?
• How is super invested?
• Key terms to know 
• Choosing a super fund
• When can you access your super?
• Checklist for starting your first job
• Changing jobs
• Keeping track of your super
• Growing your super

 

Super basics

What is super?

Superannuation is money set aside during your working years for you to live off in retirement. Your employer puts a portion of your wages or salary into your super account, and your super fund invests that money for you – helping it grow over your working life.  

Generally, your employer must pay a minimum amount – called the superannuation guarantee (SG) – into your super account.  

LEARN MORE: THE SUPERANNUATION GUARANTEE

From 1 July 2023 the SG will reach 11% of an employee’s ordinary time earnings. The SG rate will increase a further 0.5% each year until it reaches 12% in 2025.

You can add more money to your super account if you like, and this is known as ‘voluntary contributions’. 

Who is eligible for the super guarantee?

You may be eligible for the super guarantee if you’re:  

• Over 18 years old, or
• Under 18 years old and work over 30 hours a week.  

This includes casual, part-time and full-time employees.  

How is super invested?

Your super fund invests your money in assets like shares, infrastructure and property to help it grow. The returns your money makes in your super account is then reinvested. So, the money your super earns, earns more money again – also known as compound returns. 

How funds invest your super can have an impact on performance, as well as your balance. 

 

 

Choosing a super fund 

Each employer has a default super fund option. When your kid gets their first job, they can use either the default fund or choose their own.  

There are 2 main types of super funds: industry and retail. Both are set up for the member’s best financial interests. The main difference? Industry super funds put any profits back into the fund for members, whereas retail super funds return some profits to shareholders.    

READ MORE: RETAIL OR INDUSTRY SUPER FUNDS – WHAT IS THE DIFFERENCE?

It’s important to choose the right super fund for your needs over the long term. Some of the things to look at when choosing a fund include: 

• long-term performance
• investment options  
• fees and costs
• expertise
• advice options 
• insurance. 

COMPARE SUPER FUNDS

 

When can you access your super? 

You can access the money in your super account when you:  

• reach preservation age and retire, or  
• reach preservation age and transition to retirement, or,  
• turn 65 (even if you haven’t retired).  

Keep in mind, the age you can access the Government Age Pension may be different to your preservation age. 

Your date of birth	Your preservation age
Before 1 July 1960	55
1 July 1960 – 30 June 1961	56
1 July 1961 – 30 June 1962	57
1 July 1962 – 30 June 1963	58
1 July 1963 – 30 June 1964	59
After 1 July 1964	60

 

Under special circumstances, you may be able to access your super early. Learn more about early access to your super on the ATO website.  

 

Tips and information for your child’s work situation

Checklist for your kid’s first job 

• Get an intro to budgeting and saving with the MoneySmart budget planner. 
• Apply for a tax file number (TFN). 
• Compare super funds. The Government’s YourSuper comparison tool is a handy resource.  
• Choose a super fund. You can join a super fund on their website. If your super fund is different to your employer’s default fund, nominate the one you’ve joined with a Superannuation standard choice form.  

 

COMPARE SUPER FUNDS

Changing jobs 

If your child has had more than one job, they may have multiple super funds. Having more than one fund means they’re likely to be paying two or more sets of fees.  

Australians have around $16 billion in lost or unclaimed super³. You can track down any lost super and consolidate it into one fund in a few easy steps⁴. 

FIND LOST SUPER

When your child changes jobs, they can provide their new employer with their super fund details. Since 1 November 2021, if a new employee doesn’t choose a super fund, the employer must use an ATO database to check if the employee has an existing (stapled) fund.  

Super stapling - if you have an existing fund	Super stapling - if you don’t have an existing fund
Your employer must make super contributions into your existing fund.	Your employer will set you up with a new account with their default super fund. They’ll make all super contributions into this account.

Learn more about super stapling on the ATO website.  

Keeping track of their super  

Your child can keep track of their super through myGov’s ATO online services. Encourage them to check their payslips and super fund statement regularly to make sure their employer is paying the correct amount of super.  

They can also learn how their super balance compares to others their age. Knowing how their super is tracking can help them think about how to keep it growing.  

With AustralianSuper’s app, it’s easy to stay on top of your super on the go. You can manage your super, view your balance and make changes to your account anytime, anywhere.  

 

Download the mobile app

Growing their super 

Many people don’t think about boosting their super savings until they’re closer to retirement. However, the more you add, the better your chance of financial freedom in retirement is. Growing your super through your working life can help it benefit from compounding returns – reinvesting your returns to generate additional returns.  

HOW COMPOUNDING GROWS YOUR SUPER

Options to grow your super:  

• consider making additional contributions into your super account  
• understand if you’re eligible for government co-contributions 
• consider setting up a salary sacrifice arrangement with your employer.  

Before adding to your super, consider your financial circumstances, contribution caps that may apply, and tax issues.  

Take the next step 

Whether your child is starting their first job or has been working for a while, there’s always more to learn to make their super work better.  

As Australia’s largest superannuation fund, we’re here to help members live well in retirement.  

References:  

1. ATO, 'Teaching tax and super to youth', published 14 December 2018: https://www.ato.gov.au/About-ATO/Research-and-statistics/In-detail/General-research/Teaching-tax-and-super-to-youth
2. Before adding to your super, consider your financial circumstances, contribution caps that may apply, and tax issues. Salary sacrifice may affect some Government benefits and employee benefits. Consider getting financial advice before deciding what’s right for you. We recommend you consider seeking financial advice.
3. As at 30 June 2022. Trend towards single accounts. Australian Tax Office (ato.gov.au)
4. Before making a decision to combine your super, consider any fees or charges that may apply, and the effect a transfer may have on benefits in your other fund such as insurance cover. We recommend you consider seeking financial advice.