The Young Australian's Guide to Super & Investing

Superannuation is a compulsory retirement savings system where your employer is legally required to contribute a percentage of your earnings into a super fund on your behalf. In 2024–25, that rate is 11.5%, rising to 12% in July 2025. If you earn $60,000, your employer pays $6,900 into super on top of your salary — money you never see in your bank account, but that's accumulating for your future.

Here's why you should care about super right now rather than in your 40s: compound growth. Money in super earns returns, and those returns earn returns. A dollar invested at 25 has 40 years to compound before retirement at 65. A dollar invested at 45 has only 20 years. The difference in the final amount is not 2x — it's roughly 4–5x, because of compounding. The earlier the money is there, the harder it works.

Consider this example: $10,000 invested in super at 25, returning 8% per year, becomes approximately $217,000 by age 65. The same $10,000 invested at 45 becomes approximately $47,000. Same money, same return, 20 years less time — but more than four times less wealth.

• Super is invested on your behalf into assets like shares, property, bonds and cash. The default investment option at most funds is a "balanced" or "growth" option — your money isn't just sitting in a bank account.
• Contributions are taxed at 15%, not your marginal rate. For most working Australians, this is lower than their income tax rate, making super a tax-advantaged environment.
• You generally can't access super until age 60 (preservation age). This is intentional — it ensures the money stays invested and compounds over decades.

Not all super funds are equal — fees, investment performance and insurance costs vary significantly. A difference of 0.5% in annual fees sounds tiny, but over 40 years it can cost you tens of thousands of dollars in retirement savings. Choosing a better fund is one of the highest-return decisions you can make.

The key metrics to compare when choosing a fund:

• Investment performance: Look at the 5-year and 10-year returns for the investment option you'd actually be in (usually the default balanced or growth option). APRA publishes annual performance data. AustralianSuper, Hostplus, Australian Retirement Trust and UniSuper have consistently performed well.
• Total fees: The relevant number is the total fee as a percentage of your balance — including the administration fee, investment fee, and any indirect costs. Compare on the fund's PDS or use the ATO's YourSuper comparison tool at moneysmart.gov.au.
• Insurance premiums: Default insurance (life, TPD, income protection) is deducted from your super balance. Compare what you get and what it costs — some funds are much better value than others.

You're entitled to choose your own super fund regardless of what your employer uses. Complete a Standard Choice Form and give it to your employer when you start a new job. If you don't nominate a fund, your employer can choose one for you — or, since November 2021, your existing fund is "stapled" to you and follows you to the new employer.