Opinion piece from Industry Super Australia chief executive Bernie Dean
Just one in four Australians know how much money is in their super account or regularly check their balance. It’s not surprising given 70% of today’s workforce got their first job after super became compulsory in 1992 and don’t think much about it.
Many younger workers can be sceptical that their relatively small balances will ever amount to much and can become disengaged with super.
Their parents and older colleagues probably felt the same way when they were younger but are now heading into retirement with an average account balance of $360,000.
That’s what our super system is designed to do- turn small contributions made along the way into something big by the time you retire.
The next generation of workers will retire with much more than any other having received contributions from their employers for longer. Industry Super Australia modelling predicts that a 30-year-old on average wages today could have more than $500,000 at retirement.
That sort of nest egg will give millions of Australians a crack at a good life in retirement, one where you can go out for dinner now and then, take the odd trip interstate or even overseas and treat the grandkids.
While retirement is a long way off for most of us, research shows that engaging a bit more with super early in your working life means you are more likely to have better outcomes at retirement.
Those one in four workers who know their balance and regularly check super, are more likely to be in a high-performing fund and have a higher balance than those workers that aren’t as engaged.
Our super system is unique. No other type of financial investment demands so little but delivers so much in return. Employers make contributions into your account, as you work, which your fund must invest with your financial interests in mind, and the magic of compound interest does the rest.
But a little upkeep now will set your super savings up for a lifetime of growth.
So, check you super, make sure you are getting paid all your legal entitlements, check your fund is a good one with low fees and a history of long-term investment performance (the ATO has a website and there are plenty of others comparison tools online) and consolidate your super into just one account.
Then just like the song says watch as from little things big things grow.
This opinion piece was published in the Herald Sun on January 21
*The above material, whilst correct at the time of publication may include references or statements which are no longer current.