25 October 2024
Starting your working life can feel overwhelming. There are so many things to think about - from setting up bank accounts for your pay, getting to know your colleagues and workplace through to your superannuation.
While we can’t help you with all of these things, we can definitely help you navigate super.
What is super and why should we care
Each pay when you check your payslip, you may notice a percentage of your salary/wages being paid to super on top of your take home pay.Superannuation, commonly known as ‘Super’, is Australia’s retirement savings system. Eligible working Australians have a super account that their employer pays money into as legislated. However, unlike a savings account you may have with your bank, this money doesn’t just sit there, it gets invested into things like shares, property and fixed interest to help your super balance grow over time — so that you can enjoy your best possible retirement.
Five tips to make the most of your super
1. Know your investment timeframe
Your investment timeframe is how long you plan to invest your super savings before you retire, as well as how long you want your savings to last once you do retire.Given that you’ve just started your career — you’re a long way from retirement, so your superannuation savings have more time to grow and to potentially ride out market ups and downs.
When it comes to investment choices - you may want to consider options that are weighted more towards growth asset classes that have potential for long-term growth.
2. Be clear on how you feel about risk
All investments have risks — some carry higher levels of risk than others. Growth focussed investments like shares for example, carry a higher level of risk than defensive investment options like fixed interest. Risk, from an investment perspective is the potential that you could lose money - so it’s important to understand how you feel about risk. Consider how you feel when investment markets are volatile and cause your super balance to move up and down. Knowing how you feel about risk will help you choose an investment option that’s best suited to you.
To help you with this, AustralianSuper offers a Risk Profiler tool. This tool can help guide you in choosing the right investment strategy for your needs.
LEARN MORE ABOUT RISK PROFILER TOOL
3. Decide on how hands on you want to be with your super
AustralianSuper has 11 investment options to suit the different needs of members. These fall into three categories — PreMixed, DIY Mix and Member Direct.
If you invest in our PreMixed options, we manage things for you. You can build your own mix of investment types by investing in our DIY Mix options. We also offer Member Direct which allows you more control over how your super savings are invested.
The majority of AustralianSuper members are invested in the Balanced option. This is one of the Fund’s PreMixed options that invests in a wide range of assets and is designed to have medium to long-term growth with possible short-term fluctuations.
Here’s a brief look at other PreMixed options:
High Growth - Invests in a wide range of assets with a high focus on growth assets. Designed to have strong long-term growth with possible short-term fluctuations.
Socially aware - Invests in a wide range of assets, with a focus on growth assets. Certain assets are excluded based on environmental, social and governance screens. See Investment Guide for more details. Designed to have medium- to long-term growth with possible short-term fluctuations.
Indexed Diversified - Invests in a range of assets using indexing strategies with a focus on growth assets. Designed to have medium to long-term growth with possible short-term fluctuations.
Conservative Balanced - Invests in a wide range of assets with a balanced mix of growth and defensive assets. Designed to have medium-term growth with a balance between capital stability and capital growth. May also have some short-term fluctuations.
Stable - Invests in a wide range of assets with a focus on defensive assets. Designed to have medium-term growth with a higher focus on stability than growth.
LEARN ABOUT AUSTRALIANSUPER’S INVESTMENT OPTIONS
4. Boost your super balance
There are a few ways that your super balance can grow over time.
- Your employer contributions – the amount of super your employer pays into your super account
- Salary sacrificing1 — Salary sacrificing also known as salary packaging is an arrangement between you and your employer to receive less income after tax in return for your employer paying for benefits out of your pre-tax salary. One of these benefits can be super. By paying a portion of your pre-tax income into super, this portion will be taxed at 15% - the same as your employer contributions.
LEARN MORE ABOUT SALARY SACRIFICING
- Investment returns2 — these are the returns delivered to you through the growth in value of your super investments
- The power of compounding - one of the most rewarding aspects of investing in your super is the power of compounding. Compounding happens when the returns you earn on your investments start generating their own returns.2 Over time, this can turbo charge your super balance. For example, if you start investing $100 a month at age 20, with an average annual return of 7%, by the time you’re 60, you could have over $250,000. The earlier you start, the more you benefit from compounding.
5. Take advantage of expert advice
Making investment decisions can sometimes be complex. If you need help with your super, we’re here for you. Members have access to a range of advice options, from simple over the phone advice through to comprehensive advice that’s tailored to your specific circumstances.3
TO LEARN MORE ABOUT YOUR ADVICE OPTIONS
It pays to start early
Superannuation is your future pay cheque - the more you understand and take an active interest in it now, the better off you’ll be when you eventually retire.
To help you, we’ve created lots of resources from calculators to webinars and podcasts.
Sources:
- Before adding to your super, consider your financial circumstances, eligibility, contribution caps that may apply, tax issues and when your super can be accessed. We recommend you consider seeking financial advice. Salary sacrifice may affect some Government benefits and employee benefits. Consider getting financial advice before deciding if a salary sacrifice arrangement is right for you.
- Investment returns aren’t guaranteed. Past performance isn’t a reliable indicator of future returns.
- Personal financial product advice is provided under the Australian Financial Services Licence held by a third party and not by AustralianSuper Pty Ltd. Fees may apply.
Investment returns aren’t guaranteed. Past performance isn’t a reliable indicator of future returns.
The views expressed are those of the member based on their particular circumstances, reproduced with their continuing consent.
This may include general financial advice which doesn’t take into account your personal objectives, financial situation or needs. Before making a decision consider if the information is right for you and read the relevant Product Disclosure Statement, available at australiansuper.com/PDS or by calling 1300 300 273. A Target Market Determination (TMD) is a document that outlines the target market a product has been designed for. Find the TMDs at australiansuper.com/TMD.
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