Choosing your first super fund

An important part of joining the workforce is receiving compulsory, employer-paid superannuation guarantee (SG) contributions.

It's your money

Retirement may be a long way off now but the compulsory SG contributions your employer makes are still your money, even if you can’t access it until you reach the eligible age. So it is worthwhile to think about how you would like your super invested throughout your entire life.

Are you eligible for employer-paid super?

You will normally be entitled to receive SG contributions from your employer if you are 18 years old or over and earn $450 or more (before tax) in a calendar month. The current SG rate is 10 per cent of your salary or wage.

You can also make contributions of your own to your super from your after-tax pay or pre-tax salary, known as personal contributions. With time on your side, even small regular personal contributions could make a difference to your super over the course of your working life. Your employer may also allow you to make extra contributions from your pre-tax salary, these are known as salary sacrifice contributions.

A financial adviser can also review your situation and recommend other ways for you to help grow your super.

Which super fund should you choose?

Your employer will provide a suggestion for a default super fund your super contributions will be added to if you don’t nominate a fund of your own. Most employees are also free to choose their own super fund, and this is an area where a financial adviser may be able to help, offering suggestions on the funds that may be suitable for you.

If you choose to accept your employer’s default fund, be sure to make a note of the super fund and your account number. This way you can take the same account with you if you change jobs, which is a way to ensure you don’t lose track of your super in the future.

What to consider when choosing a super account?

It can be tempting to choose your super fund based on past years’ returns but there is so much more to consider when making your selection. Be sure to look at fees, the investment options you can select, the availability of insurance such as life and income protection insurance, as well as the range of additional services that may be available to fund members.

Next: Investment strategies for your super

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This information is current as at 1 July 2021.

This information has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation and needs.

This information provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such.

Generally, contributions to a superannuation fund are preserved. The government has placed restrictions on when you can access your preserved benefits. In general, benefits will not be able to be paid until a member is age 65, or has permanently retired and is above his/ her preservation age (i.e. 55 years up to 60 years depending on when the member was born). For more information, please refer to the ATO website.

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