Here are nine practical steps young educators can take to get on top of their super.
1. Find your super – and make sure it’s all in one place
Start by logging into your account. If you don’t know where your super is – or how many accounts you have – you can check through your MyGov ATO account.
Many young Australians have multiple super accounts from different jobs, which can mean paying multiple sets of fees and insurance premiums. Once you’ve found your accounts, it’s worth checking whether you should consolidate them into one fund. Fewer accounts often mean fewer fees.
2. Check your employer is actually paying your super
Make sure you can see your employer contributions coming into your account. Missing contributions can go unnoticed for long periods, especially if you’re not regularly checking.
3. Understand how your super is invested
Check how your money is invested – and understand whether your investment options align with your age, investment goals and how long you have until retirement. You don’t need to make changes straight away, but understanding your investment mix is an important first step.
4. Know what insurance you already have
Super often includes built-in insurance. Check whether you have cover such as death, permanent disability or income protection insurance. It’s important to understand what you have and whether it suits your situation.
5. Start small – early decisions matter most
With the compounding effect of investment returns, changes made early in your career can have a significant impact on your retirement. Leaving it too late gives you less time to improve your position if you realise you’re not on track.
6. Take advantage of the government co-contribution offer
government’s income threshold, you may be eligible for a super co‑contribution when you make an after‑tax personal contribution. The government adds 50 cents for every $1 you contribute, up to $500, with this amount reducing as your income increases and cutting out at the upper threshold.
Thresholds are indexed each year, so eligibility and payment amounts can change. See the ato website for more information.
7. Use salary sacrifice if it makes sense for you
If your marginal tax rate is higher than the 15% contributions tax in super, salary sacrifice can be worth considering. There’s no minimum contribution – you can automate a monthly contribution of $5, $50 or $500. Every dollar counts thanks to compound interest over time.
8. Don’t assume the system won’t work for you
While governments do make changes over time, super has consistently remained a tax-effective way to save for retirement. The key incentives to contribute have been maintained.
9. If you’re saving for a home, consider how super might help
The First Home Super Saver Scheme allows you to make voluntary contributions to super and then withdraw them for a home deposit – while potentially saving tax. But make sure you’re eligible first – otherwise the money will remain in super until retirement.
The bottom line
For most people, it starts with simple steps – knowing your balance, checking where your super is invested and understanding the options available to you. These are small actions, but over time they can make a meaningful difference.
Not sure where to start?
Confidence starts with knowledge. NGS Super has a new complimentary Virtual Advice tool which may be able to help guide you through some general information about super. If you would prefer to speak to a real person, book a complimentary chat with an NGS Super Specialist, they can provide general information about super may help you better understand the choices available.
This information is general information only and does not take into account your objectives, financial situation or needs. Before acting on this information, or making an investment decision, consider whether it is appropriate to you and read our Financial Services Guide, Product Disclosure Statements and Target Market Determinations available at ngssuper.com.au. You should also consider obtaining financial, taxation and/or legal advice tailored to your personal circumstances before making a decision. Issued by NGS Super Pty Ltd ABN 46 003 491 487 and AFSL 233 154.
