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Superannuation Tips for Teens

There has been a fair bit in the news recently about superannuation. But retirement is so far away, why should you worry about it, right? Well, it’s actually something you probably need to start thinking about now. So read on to get some handy superannuation tips for teens.


What is superannuation?


Superannuation (also commonly referred to as ‘super’) is a way of saving for retirement. It’s a bit like a big savings account (called a ‘fund’) that both you and your employer put money into over your working life, so that when you retire, there’s money set aside for you to keep living.

This is why it’s important to start thinking about early – the sooner you start saving, the more you’ll have when you retire. Makes sense, right?


Where does the money come from?


Most of the money in your super fund will probably come from your employer. If you’re over 18 and earning more than $450 a month, your employer must pay a minimum amount of money into your super fund. The amount paid is a percentage of your earnings (at the time of writing, it’s 10.5%). So based on earning $450 a month, your employer should be putting at least $47.25 into your super fund every month.

Your employer must pay super regardless of whether you’re employed full-time, part-time, or casually.

Note that if you’re under 18, employers only need to make contributions to your super if you earn more than $450 a month and work at least 30 hours a week.

You can also make what are known as voluntary contributions to your super fund – this is where you choose to top it up with some extra money.

Your super will also grow over time because the fund where it’s stored will invest the money for you. You can choose where and how your super is invested, and pick between safer and more risky options.


How do I pick a super fund?


If you don’t nominate your own super fund when you start working, you’ll probably get started with a MySuper account. But you can definitely pick your own super fund and tell your employer that’s where you’d like your super sent to as well.

Each time you move to a new employer, you’ll need to tell them you already have a super account, or a new one will be opened for you instead. It’s usually a smart idea to keep all your super consolidated into one fund. It means you’ll pay less fees, and make it much easier to keep track of how much you’ve saved.

When it comes to choosing a fund, there are quite a few things to consider, including:

  • Fees – all funds will charge fees to hold your money, so finding one with low fees is usually a good idea.
  • Performance – what kind of return do other members usually see on their investment?
  • Insurance – super funds often give you peace of mind with insurance options in the event something happens and you can no longer work.
  • Investment options – see if your chosen fund gives you flexibility in how you choose to invest your money, and lets you pick where your money is invested (if you’re a keen environmentalist, for example, you probably won’t want your money invested in a coal mining company).

All getting a bit confusing? Don’t worry – there are tools out there that will help you compare super funds. Canstar has one you might like to check out. But remember there are some things you should keep in mind when using comparison tools online.


Where can I find out more?


There are heaps of resources out there that can help you understand more about super. One of the best includes the government’s Moneysmart website, which also has heaps of tips for other things like banking, loans, and investments too.

We also have more superannuation and money tips for teens on our website here.


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