How to sign up to your first super fund

What is super?

Superannuation, or ‘super’, is your retirement savings in Australia. Think of it as a special bank account for your future: money that you earn today grows over time and helps you live comfortably when you stop working.

The government supports super by giving it tax advantages, meaning your money grows faster than it would in a regular savings account.

If you earn income from a job, your employer must contribute a percentage of your salary into your super fund. This is on top of your regular pay. For example, if you earn $50,000 a year and your employer contributes 11%, that’s $5,500 added to your super account each year.

Super is locked away until you reach your ‘preservation age’ (usually between 55 and 60) and meet the conditions to access it. This might seem restrictive, but it ensures your money is growing for your future self

How super works

Super isn’t just money sitting in an account, it’s an investment. Your super fund uses your money to buy things like shares, bonds, and property. These investments earn returns over time, which are added back to your account. This is called compounding, and it’s the main way your super grows over decades.

If you start saving super at 18 years old and earn an average salary you could retire at 65 with about $650,000 in the bank, on top of anything else you own like a business or property. You can play around with possibilities using the Money Smart Superannuation Calculator.

There are two main ways money goes into your super:

• Employer contributions: Currently 12% of your salary every year (2026).
• Voluntary contributions: You can add extra money through “salary sacrifice” or after-tax payments. The government sometimes provides additional contributions for eligible low- and middle-income earners.

Checking for lost/unclaimed super

Before making any decisions, it’s important to check whether you already have super hidden away in old accounts. Many people lose track when they change jobs.

Steps to find lost super:

• Log in to myGov and link your ATO account to check directly.
• Use the ATO app to see if you have any super.
• Call the ATO lost super line if you’re still unsure.

Why this matters:

Even a small lost super account can grow substantially over decades due to compounding. Consolidating lost accounts into your main super fund can reduce fees and make managing your super easier.

Choosing a super fund

There are many super funds to choose from, and picking the right one can make a significant difference over your lifetime. The main factors to consider include:

• Fees: Lower fees mean more money stays in your account. A difference of 0.5–1% in annual fees can amount to tens of thousands of dollars over decades.
• Investment performance: Look at long-term returns (ideally 10 years). Past performance isn’t a guarantee, but consistent returns show the fund manages money well.
• Investment options: Some funds let you choose how your money is invested, e.g., growth, balanced, or conservative options.
• Insurance: Many funds offer default life, total and permanent disability, and income protection insurance. Check whether the default coverage suits your needs.
• Values and ethics: Some funds focus on sustainable or ethical investments if that aligns with your priorities.

It is possible to change your super fund (known as ‘rolling over’) which in most cases is not subject to tax. You are not locked into a fund, giving you flexibility to move if your needs change.

Types of super funds

There are five main types of super funds, each with different features:

1. Industry funds: Often started by unions for workers in specific sectors. They usually have lower fees and strong performance.
   • Examples: Cbus Super, HESTA.
2. Retail funds: Run by banks or financial institutions. They often have more investment options but higher fees.
   • Examples: AMP, CommBank.
3. Public sector funds: For government employees. Typically low fees and tailored benefits.
   • Example: ADF Super.
4. Corporate funds: Set up by employers. Some are only for employees, some are open to the public. They may offer negotiated insurance or fees.
5. Self-managed funds : You manage these yourself with up to six members as trustees. Self-managed funds require knowledge, time, and money, and are not recommended for beginners.

Pro tip: Consider your needs, time, and knowledge before choosing a self-managed fund. For most people, a good industry or retail fund is simpler and cheaper.

Comparing super funds

The ATO’s YourSuper comparison tool helps you compare funds. Focus on:

• Investment performance: How has the fund grown money over the last 10 years?
• Total fees: Lower fees help your balance grow faster.
• Investment options: Do they match your risk preferences?
• Insurance options: Are they flexible and sufficient?

Example: Two funds may have similar returns, but one charges 1.2% fees and the other 0.6%. Over 30 years, the lower-fee fund could leave you tens of thousands of dollars better off.

Insurance in super

Most super funds automatically include insurance:

• Life insurance: Pays a lump sum to your family if you die.
• Total and permanent disability: Pays if you can’t work due to serious injury or illness.
• Income protection: Replaces part of your salary if you can’t work temporarily.

Premiums come directly from your super, reducing your account balance slightly. Check whether the default coverage suits your situation, and adjust if needed.

Example: If you earn $60,000 a year and your fund provides income protection covering 75% of your salary, you could receive $45,000 per year if you are temporarily unable to work.

Accessing your super

You usually cannot access super until you reach your preservation age and retire. Preservation ages range from 55 to 60 depending on birth year.

Early access is possible in certain circumstances:

• Severe financial hardship
• Compassionate grounds (e.g., medical bills)
• Terminal illness

Common mistakes to avoid

Many people reduce their retirement savings without realizing it. One common mistake is having multiple super accounts from past jobs. Each account charges fees, which slowly erode your balance. Consolidating these accounts into one can save money over the long term.

Another mistake is ignoring investment options. Most super funds place members in a default option, which might not suit your risk tolerance or retirement goals.

Insurance is another area where people make errors. Some members have insufficient coverage, while others pay for policies they don’t need.

Finally, failing to review your super regularly can leave you unprepared for life changes, like a new job, a salary increase, or starting a family. Checking your super at least once a year ensures it continues to work for you.

Signing up for super

Signing up for super is straightforward. Start by checking whether your employer has a default fund or recommends a particular super. Compare this option, or any other funds you’re interested in, with other popular super funds to find the one that best suits your personal needs and goals. Once you’ve chosen a fund, you can usually apply online, or ask your employer to direct your contributions to their default option. When applying, make sure you have your tax file number and personal details ready to make the process quick and easy.