Retirement probably feels like it’s a long way away, but the sooner you take an interest in your super, the greater the reward when you finish working 

It’s been widely publicised that many Australians will have to work longer than they would like to – just so they can afford to retire.

The sooner you understand how super works and the benefits it can bring you, the better off you’ll be in the years to come. Could you afford to live on the Age Pension? Will there be an Age Pension by the time you retire?

Here are some facts to think about:

  • The employer Superannuation Guarantee rate is currently 9.5% and is proposed to increase to 12%
  • A lot of millennials have no idea about super, some don’t know the fees they’re being charged or have any idea how their super is being invested. Awareness and taking control can make your super work a lot harder for you
  • Australians have more than 6 million unnecessary duplicate super accounts*

It’s really important to think now about the sort of life you want to live in retirement, and the income you’ll need to pay for that lifestyle – then get cracking to make that happen!

How much do you know about your super? Some questions to ask yourself...
  • Do you know how much super you have?

    Super is a lifetime investment that may have many benefits. Whatever your age and no matter how much money you have, now is the time to start building your super – and it all starts with knowing how much super you currently have. 

    If you’re a Qantas Super member, you can check your balance now. 

  • Can you add to your super account yourself?

    You may be able to contribute to your super with pre-tax money – known as salary sacrificing – which also has tax benefits.

    You can also contribute to your super from your after-tax salary, and depending on your taxable income, you may be eligible for the superannuation co-contribution or the low income super tax offset.  

    If you want to retire comfortably, your employer contributions may not be enough to build your nest egg.

  • Have you checked for lost super?

    If you’ve ever changed your name, address, job, or done casual or part-time work, you may have lost track of some of your super. The Australian Tax Office (ATO) has a register that records the billions of dollars in unclaimed superannuation. 

    From 1 July 2019, Reuniting Australians with their super is a new law to protect your superannuation savings. Super providers are required to pay inactive low-balance accounts to the ATO. The ATO will be able to proactively reunite your unclaimed super money into one of your active super accounts.

    You can check for any lost super through your Qantas Super account.

  • Can you withdraw your super at any time?

    Usually, super is not available until you retire. The savings you have made are preserved, which means they can’t be touched until you reach your preservation age – this can range from 55 to 60 depending on your date of birth.

    Date of birth Preservation age
    Before 1 July 1960 55
    1 July 1960 – 30 June 1961 56
    1 July 1961 – 30 June 1962 57
    1 July 1962 – 30 June 1963 58
    1 July 1963 – 30 June 1964 59
    After 30 June 1964 60
  • Can you choose your own super fund, or do you have to go with your employer’s fund?

    Most people can choose their own super fund for their superannuation guarantee (SG) contributions. However, some people who are covered by industrial agreements – like some government departments – may not have this choice. MySuper is a super product that is a ‘default’ option if you haven’t made a choice on where you want your super to be invested. 

    Qantas Super is the default superannuation fund for employees of the Qantas Group and associated employers. 

  • Do you have more than one super account?

    Have you kept track of all your super? Combining your super into one account (also known as consolidating) will mean you only pay one set of fees and insurance premiums. You also reduce paperwork and make it easier to keep an eye on your nest egg. 

    Look for all your super statements – go through that bottom drawer and check your emails to find them. Then make a plan to review and consider combining them into one super account if it’s right for you. 

  • What are your fees?

    All funds are not created equal, which means each fund can set their own fees. The most common ones are: 

    • Administration 
    • Investment 
    • Buy-sell spread 
    • Switching fee 

    Fees are typically deducted from your account at the end of each month and can be either a dollar amount or a percentage. 

    Did you know?

    Small differences in both investment performance and fees and costs can have a substantial impact on your long-term returns.

    For example, total annual fees and costs of 2% of your account balance rather than 1% could reduce your final return by up to 20% over a 30 year period (for example, reduce it from $100,000 to $80,000).

    It’s important to consider whether features such as superior investment performance or the provision of better member services justify higher fees and costs.

  • Do you know where your super goes when you die?

    You can nominate the people you want to receive your super money (your benefit) if you die. This nomination can be binding or non-binding. A binding nomination means the trustee will pay your benefit to the person you nominated (provided it meets certain criteria). A non-binding nomination is more like a recommendation. 

    Remember to review your superannuation beneficiaries whenever your circumstances change. You can update your beneficiaries online.

  • Do you know how often your employer pays your super?

    Your employer should calculate and report your super contributions on every payslip you get – and they must pay contributions to your super fund at least quarterly. 

    Just as important as a regular pay packet are the contributions your employer makes to your super. 

    If you’re unsure how much super you should be paid, call your Payroll team or representative. 

Understanding your super statement

The annual super statement you receive – you know, the envelope that never gets opened, or gets thrown out? Well, it has loads of important information that you really need to know about.

Member details

Here you’ll find your member number, if you have a Tax File Number lodged with the fund, and your address details for correspondence. Lots of super funds are using email now to contact members and keep in touch.

Account summary

This section is a summary of your transaction history, for example, what’s gone in and out of your account.

Benefit components

There are three benefit components – preserved, restricted non-preserved, and unrestricted non-preserved – the category determines when you can access each amount. Benefit components make up your account balance.

Some statements will show you graphically or in a table how your account balance has changed over a period of time – say, the last three years. This is information you can use to see how your fund is performing.

Your investment choice

Depending on the type of investments you’ve chosen, this section outlines your investment mix – cash, fixed rate, shares, property etc. – and how they have performed for the investment period.

Beneficiary information

If you have nominated beneficiaries to receive your super or insurance payouts, they will be listed here, generally with a percentage figure next to their name to indicate how much they should receive from the total payout. Remember to review this as your circumstances change.

Transaction history

A listing of all account transactions for the statement period – here you can check your employer contribution amounts are correct.

Fees

Breakdown of the total fees you have been charged for this statement period.

The ages and stages of super

It’s important to review your investment strategies for superannuation over your lifetime.

Super is a long-term investment, with returns that will fluctuate over the years. It’s all about risk and return. Typically, higher risk investments come with the potential for higher earnings, while lower risk investments generally come with lower earning potential.

Here are the main things you may wish to consider:

  • Can you afford to make additional super contributions?
  • Is your choice of super investment suitable for your life investment needs, goals, and attitude to risk?
  • Are your beneficiaries up to date?
  • Are you taking advantage of the benefits of insurance inside your super?

The most important thing to remember is to regularly review your choices, whether that be your investment choice, your beneficiaries, or your level of insurance cover. The chances are your choices will change as your circumstances change, like when you buy a house, your relationship changes, you get married, or you start a family.

Case study: Andy

It’s important to take control of your super and tap into the magic of compound interest.

Meet Andy.

He’s 25 on a salary of $50,000 with a $10,000 super balance. If he just relies on employer contributions to his super he would have a balance of about $370,000 in today’s dollars when he’s 65.

If Andy puts in an extra $25 a week from his before-tax salary, that balance would grow to about $450,000. That’s about $80,000 more, for putting in about $52,000 in before-tax dollars.

This is due to the power of compounding – which means the longer you have money saved, it doesn’t matter how small, the more interest it will collect – so you’re getting interest on interest.

Here are some other tips to boost your super:

  • Find your lost super. There are more than 6.3 million ‘lost’ super accounts worth a whopping $18 billion!*. Some of this could be your money.
  • Consolidate your super so you aren’t paying more than you need to in fees, like insurance premiums
  • If your income is less than $53,564* you may be eligible for the super co-contribution – giving you 50 cents for every dollar you make as a personal after-tax contribution (up to $500) – now that’s easy money!
  • If you get a pay rise or tax refund, consider putting that into your super account instead of spending it. Remember the magic of compounding.
  • If you get a pay rise of tax refund – consider putting that into your super account instead of spending it. Remember the magic of compounding!

Before consolidating your super you should consider whether this is right for you and check if you will be charged any exit or other fees. You should also check the impact on any insurance arrangements (such as loss of insurance) or other benefits.

*ATO, Multiple super accounts data, June 2018

Before consolidating your super you should consider whether this is right for you and check if you’ll be charged any exit or other fees. You should also check the impact on any insurance arrangements (such as loss of insurance) or other benefits.

Other info you might be interested in

The basics of super investments

Whether you’re just starting out or nearing retirement, it’s important to take an interest and make your super investment work for you.

Understanding risk and diversification

Investment risk is the chance that the value of an investment will drop. All investments have risks.

The role of financial planning

Good financial advice can help you set goals and make confident and informed financial decisions, now and in the future.

Learning Hub

Understand your super and the simple steps you can take to stay in control.

We're here to help

If you want to learn more or need help with making a decision about your super, you can get simple advice over the phone or face to face. It’s included as a part of your membership so there’s no extra cost.