For many of us, super is that frustrating 10% on our salary that we won’t see again until we hit 65. Not an exciting prospect, especially in the generation of ‘I want it now.’
Some people see super as a government implied child-lock on our money to make sure we don’t spend it all and end up with nothing for retirement.
If you fall into this category, the stats below about Australians and their super might shock you:
- Australians have a combined $3.1 trillion in super, larger than the entire ASX market.
- $100 billion of Australian’s money is in underperforming super funds.
Research conducted by Superhero in June 2021 also found that:
- 1 in 3 people under the age of 45 rarely or never check their super
- 17% of people under the age of 45 don’t know which type of super fund they’re with.
Why are we so unengaged with our super?
What is superannuation?
The Superannuation Guarantee (SG) was introduced in 1992, requiring employers to make a contribution of 3% into a super fund on behalf of their employees. Since this time the contribution percentage has gradually risen to 10% in 2021.
When you get your first job, you will need to select a super fund. If you do not wish to select your own super fund, your employer will pay your super into a default fund, also known as a MySuper fund.
You can change your super fund at any time, but it is important to remember which super fund you are with as this could lead to additional fees that can erode your balance over time. As of 2020, more than 1 in 4 Australians still have more than one super fund.
The government has also recently introduced a process to call out underperforming super funds to help Australians make better decisions for their future.
What is a self managed super fund?
You may have heard of a self managed super fund (SMSF), which allows you to invest your super yourself. The benefit of an SMSF is that you have a greater degree of control over your investments but they take time and money to run.
In 2019, the average operating cost of running an SMSF was $6,450, which is why this option is often only chosen by those with larger super balances.
Even with a lower cost SMSF, just the complexity of completing a tax return for your SMSF can be a burden for a lot of people.
Realise the power of your super
To show you how even a small difference in return can make a big difference and help you to realise the power of super in long-term wealth creation, let’s look at an example using the government’s superannuation calculator.
Kate is 30 years old and plans to retire at 65 years old. Her income is $100,000 before tax and according to APRA the average balance for a woman her age is $22,850.
In a super fund with default fees and tax rates, her balance at retirement based on an average yearly return would be:
- 7% return: $519,525
- 9% return: $757,137
That’s a difference of $237,612 or 46% if your return were just 2% higher per year.
How is Superhero different?
Superhero Super offers you the flexibility and freedom to invest your super your way, whether you set up an automatic investment portfolio with Autopilot or you want to invest your super directly into shares and Exchange Traded Funds (ETFs). All this without the admin and costs of a self-managed super fund.
Your super is a crucial part of building your financial future which is why we’ve created a platform that puts your super in the palm of your hand. You have the power to take control of your future with Superhero Super.
Please read our Product Disclosure Statement, Additional Information Guide, Investment Guide and Insurance Guide in addition to our Target Market Determination for our Autopilot Account and Control Account for full information regarding Superhero Super. A Target Market Determination (TMD) is a document which describes who a product is appropriate for.
The information on this webpage has been prepared by Superhero Markets Pty Ltd (ABN 36 633 254 261), a Corporate Authorised Representative (CAR No. 1276309) of Sanlam Private Wealth Pty Ltd (ABN 18 136 960 775) (Australian Financial Services Licence (AFSL) No. 337927) and Superhero Securities Limited (ABN 96 160 456 315) (AFSL No. 430150). Superhero Super is issued by Diversa Trustees Limited (ABN 49 006 421 638), (AFSL No 235153), as trustee of OneSuper (ABN 43 905 581 638). Superhero Super is a sub-plan of OneSuper. Superhero Super is a sub-plan of OneSuper.