Super idea for school leavers

Paul Clitheroe.
Paul Clitheroe.

OVER the past few weeks thousands of Australian teenagers have reached a significant milestone in life.

Their final Year 12 exams are completed and their days as a school student are over. For many of these teens, the summer will be spent working in holiday jobs until uni or TAFE starts next year, others will take on permanent job. It's at times like these that parents can provide valuable final advice - especially when it comes to choosing a superannuation fund.

Young workers aged 18 or more who earn over $450 each month in before-tax wages, are entitled to employer-paid super contributions. It doesn't matter whether you're full time, part time or a casual worker, you're still eligible for these compulsory super payments.

Workers aged under 18 are still eligible to receive super contributions. But in addition to earning over $450 per month you will need to work more than 30 hours each week.

Holding a summer job that lasts several months, can mean earning a fair bit in employer-paid super. So it's important to know which fund these contributions are paid into.

Australians collectively have around $6 billion dollars sitting in unclaimed or 'lost' super accounts. A great deal of this money is the result of casual or part-time workers losing track of their super.

By the time today's teens have reached retirement age, the super earned this summer will have grown into something substantial. So it makes sense to choose a fund that can stay with today's teens for life.

Most workers have the option to choose the super fund they want their employer contributions paid into. Once an employee has decided on a fund, you need to let your employer know the details in writing, providing you and your employer a clear record.

The key issue is which fund to choose. There are two main types of fund to select from - retail and industry funds. Many industry funds operate on a non-profit basis, so the annual fees are low. Retail funds on the other hand, tend to offer a broader range of investment options.

Both have their merits, and the main point is to take a look at the different options available rather than simply, accepting an employer's default fund.

For young people, with plenty of time to retirement, it makes sense to choose a growth option within their super fund. This should maximise the capital growth of a nest egg over the very long term until retirement.

Whichever fund is chosen, I cannot stress enough the importance of keeping track of the fund details plus the relevant account number, and notifying the fund if your son or daughter change their address.

Over recent years a number of smaller funds have combined to gain cost and investment efficiencies, and this is likely to continue in the future. It's essential for fund members to be able to track their super savings over the forty or more years spent in the workforce. The only way to do this is by maintaining good records and having an active interest in your super from day one.

Paul Clitheroe is a founding director of financial planning firm ipac, chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine. For more, visit

Topics:  school schoolies school leavers superannuation tafe univeristy

Stay Connected

Update your news preferences and get the latest news delivered to your inbox.

Suspected arson at CQ schools investigated by police

Police are investigating a fire that destroyed a building at Biloela State High School overnight.

Police investigate other reports of attempted arson at the school

'Life's work lost': Support for staff, students after fire

Biloela State High School principal John Adie said the school lost a lot of resources in last night's fire.

Support has been offered to staff and students following a school fire

Local Partners

Azealia Banks won't take legal action against Russell Crowe

Rapper Azealia Banks

Rapper drops legal action against Russell Crowe

Brad Pitt meets with his kids amid divorce proceedings

Actor Brad Pitt

Brad Pitt has met up with his oldest son Maddox

Pictures of Taylor Swift allegedly being groped are sealed

They could "complicate jury selection".

Bruce Springsteen finds therapy useful

Singer Bruce Springsteen

Singer encourages others to seek help

Kerry Washington wants one more child

Kerry Washington recently gave birth to her second child

Kerry has only just become a new mum again

TRAVEL: Musicals light up Sydney

David Campbell performs in Dream Lover.

We take a trip through one of Sydney's finer scenes

Hit songwriter's Noosa mansion on market

SPECIAL PLACE: The Cintamani estate is going to tender, marketed by Tom Offermann Real Estate.

Is this Queensland's best property?

Kiwi siblings snap up Dotcom mansion for $32.5m

The new toy company owners of the Coatesville mansion want replace any controversy with positivity and fun. Photo / Barfoot and Thompson

The trio paid $32.5 million for the property in June

New $200 million development will create 580 jobs

Cassie And Josh with baby Alfie and daughter Andee. They have bought at new Lennox Head development Epiq.

Majority of new positions will be given to Northern Rivers locals

Cherrabah's mega resort plans axed

PLANS for a massive development at Cherrabah have been scrapped.

What our mayor thinks of the new draft SEQPlan

The plan to use the innovative technology as part of the new Maroochydore CBD was cemented on site today when Mayor Mark Jamieson and Envac Asia Region president Chun Yong Ha formally signed the contract for the $20 million underground waste collection system.

New plan accommodates Sunshine Coast Council's vision for growth.

Dusit Thani finance crisis 'just a small hiccup'

ON TRACK: Springfield Land Chairman, Maha Sinnathamby, Ipswich Mayor Paul Pisasale, Developer Richard Turner and Springfield Land Deputy Chairman, Bob Sharpless, at the recent resort sod turning ceremony.

Property developer says project remains firmly on track