Six Facts You Should Know About Superannuation

Level up your super knowledge!

This article is presented in partnership with Aware Super.

Pop quiz! What do you know about superannuation? … Got nothin'? Well, you're not alone.

Most young Aussies don't have a clue about their super, what fund they're with or even how it all works. So, to help you understand better, here's six super facts you should know.

1. You can choose where your super goes.

If you’re working or about to start a new job, you usually need to complete a superannuation form for where you want your super to be paid. 

New laws introduced in November 2021 will see your first or current active super account 'stapled' to you as you move from job to job. This means that if you’re currently with an underperforming fund you will be stuck with them unless you take action to choose a good one. And if you get stuck to an underperforming fund? Well, you could end up with less in retirement.

So, when your employer asks where you would like your super money to go, its worth doing your research.

There are plenty out there depending on what you’re looking for. If you want to make a difference to our planet and society, for example, Aware Super could be a good option.

2. If you work part time you can still get super.

Super often sounds like something older adults with high paying jobs are entitled to. But this is a huge misconception.

There is great news for those of us working in casual jobs. The 2021/22 Federal Budget scrapped the $450-a-month threshold for guaranteed employee payments into super, so as of 1 July, 2022, eligible employees who earn under $450 per month will be paid super. 

Currently, under the superannuation guarantee, “employers have to pay super contributions of 10% of an employee’s ordinary time earnings” when they’re paid $450 or more before tax in a month. You must be over 18 years, or under 18 but working 30 hours a week.

Know your entitlements!

3. A “Super Co-contribution” is available for low and middle income workers.

If you earn less than $56,112 in the 2021-22 financial year you could be eligible for a government co-contribution of up to $500 when you make a personal after-tax contribution into your super. You can read more here. 

4. You can consider using your super to save for a home deposit.

You may be able to use superannuation to start saving for your first home through the government’s First Home Super Saver Scheme.

You can make voluntary concessional (before-tax) and voluntary non-concessional (after-tax) contributions into your super fund to save for your first home.

5. You can add to your super through “salary sacrifice” and other methods.

Your employer’s compulsory super contributions may not be enough for the retirement you want. In other words, if you wanna spend the latter years of your life in a mansion in the Bahamas, you may want to add to your super.

Aware Super has an infographic with some tips for topping up that invisible piggy bank.

One of these methods is “salary sacrifice”. It involves putting some of your income directly into your super before your employer calculates and deducts tax.

It’s all about being resourceful!

6. Speaking of dream retirements, you can calculate how much that will cost.

If you really want to plan ahead and secure your glamorous geriatric lifestyle, there are some handy tools to do so.

Check out this retirement income calculator from Aware Super to see how your super is tracking today and how much the retirement lifestyle you want could cost.

Feeling a bit more cluey about all things super? You have more control than you think—and you can check out Aware Super to learn even more.

Header Image: Mikael Blomkvist via Pexels

Personal advice requires the provider to act in the client’s best interest and take into account the client’s circumstances.  These rules do not apply to general advice.  All content provided by Aware Super and published in this guide contains general advice only and no personal advice. We have not taken into consideration any of your objectives, financial situation or needs or any information we hold about you when providing this general advice.  Further this communication does not contain, and should not be read as containing, any recommendations to you in relation to your product. Before taking any action, you should consider whether the general advice contained in this communication is appropriate to you having regard to your circumstances and needs, and seek appropriate professional advice if you think you need it. Contact us to make an appointment to see one of our representatives. You should also read our product disclosure statement and the relevant target market determination before making a decision about Aware Super. Call us or visit our website for a copy.  Issued by Aware Super Pty Ltd ABN 11 118 202 672, AFSL 293340, the trustee of Aware Super ABN 53 226 460 365. Financial planning services are provided by our wholly owned financial planning business Aware Financial Services Australia Limited, ABN 86 003 742 756, AFSL No. 238430. You should read their Financial Services Guide before making a decision.