Super in your 20s. Boring? It doesn’t have to be!

Superannuation is for the oldies, right? In some ways that’s true, but even in your twenties there are good reasons to take a bit more interest in your super. The average 25-year-old has around $10,000 in super, but the decisions you make now, even with relatively small sums of money, could earn you hundreds of thousands of extra dollars over your working life.

Are you getting any?

Every three months your employer should be paying 10% of your income into your super fund. Usually you can choose which fund your super goes into; if you don’t, it gets paid into a super fund of your employer’s choice. But that doesn’t mean you don’t get a say in how it’s invested.

If you don’t know if your super is being paid, or the fund it’s being paid into, ask your employer. If you think you’re missing out, search ‘unpaid super’ on the tax office website to see what you can do. This is your money.

Where have you got it?

Had more than one job? If you have a lot of little super accounts the money can disappear in a puff of fees and default insurance premiums. Simple fix – combine your super into one account, but check out what existing insurances you may have inside your super before you roll over your funds.

What about insurance?

If you don’t have any dependents, your super fund could be paying for default insurance you don’t really need just yet. Cancelling unnecessary life insurance leaves more money in your account to boost your savings. On the other hand, if you do need life or disability insurance, then funding these through super could be a better option.

Is it working for YOU?

Your money is going to be stuck in super for a long time, so you want it to be working hard for you. Most funds offer a range of investment choices and some will do better than others.

An investment choice that is expected to produce higher returns over the long term can bounce up and down in value. Some years it may even go backwards in value. However, ‘safer’ investment options usually produce lower long-term returns.

What do you want?

Buying a new car travelling, having fun. Let’s face it, there are lots more exciting things to do with your money than sticking it into super. The choice is yours, but think about this:

  • If Mum and Dad retired this year, they would need a minimum of around $62,828 per year to enjoy themselves1. If that doesn’t sound like much now, by the time YOU retire inflation could have pushed that annual amount to around $217,4292.
  • Fact: Current life expectancies would indicate you’re going to live much longer than your parents and grandparents. Can you imagine living another 30 years without earning an income? A sound investment plan designed to make your super work hard while you’re employed will be the difference between enjoying those decades and surviving on an Age Pension, if they still exist!
  • Starting early and adding a bit extra when you can makes a big difference. Due to the compounding of interest over time, if you start now by making an extra pre-tax contribution of just 1% of your annual income to super (subject to contribution cap limits), continuing this small extra contribution as your salary increases will add significantly to your super fund balance by retirement.

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1Income required to provide a couple with a “comfortable” level of income as calculated by The Association of Superannuation Funds of Australia (ASFA) (March 2021)

2Value of $62,828 today in 42 years at 3% inflation.

So, still find super boring? That’s okay; you’re not alone. But instead of finding the time to organise all this yourself, contact a licensed financial adviser who will review your current super, any insurance required, the investment choices and prepare a strategy to get your super into shape – then you can get back to enjoying life!


The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional.
We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.
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