Money

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 www.paulsmoney.com.au

Topics:  school schoolies school leavers superannuation tafe univeristy


Stay Connected

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

Police seek assistance to locate missing man

MISSING: Queensland Police are seeking public assistance to locate Clancy Bligh, 45.

Clancy Bligh, 45, has not been heard from since December 22.

No trucking worries: Recycling service upgraded

HEAVY DUTY: Col Nevell (left) shakes hands with mayor Nev Ferrier as Lions Club volunteers test out the truck's lift.

Callide Valley Lions Club recycling to continue in comfort.

Time to recognise region's modern pioneers

NOMINATIONS EXTENDED: Banana Shire residents have until January 26 to nominate a modern pioneer.

Nomination date extended until January 26.

Local Partners

Every's five-fer puts Teys in prime position

The Primed XI quick took 5/9 last Saturday against the Dawson Valley Taipans to put Teys at the top of the ladder.

Puppetry of the Penis secrets revealed ahead of show

The famed Puppetry of the Penis is coming to the Sunshine Coast for shows in Noosa and Caloundra.

WARNING: This interview contains adult themes and traces of nuts

Noll meltdown won't affect Gympie Oz Day concert

Shannon Noll

Photo Contributed

Shannon Noll is still expected to perform in Gympie next Thursday

The surprising problem police face at Woodford Folk Festival

STREET SCENE: Woodford Folk Festival 2016.

The biggest issue for police at Woodfordia is not what you'd expect

Ocean Sleeper discuss being 'Six Feet Down'.

Ocean Sleeper make waves with their new EP. Photo Contributed

Gippsland band shines at Unify

Bowie's final music EP No Plan released

NEW: Artwork for David Bowie's posthumous 2016 EP, No Plan.

David Bowie's 28th and final album

Married At First Sight: Ipswich bachelor seeks love

READY FOR IT: Ipswich man Simon McQuillan will appear on the upcoming new season of Married At First Sight.

Romance would top off recovery for Booval man

Dinky-di Denyer: Family Feud favourite hosts Oz Day party

Grant Denyer will host Channel 10's Australia Day concert from the Sydney Opera House.

GRANT Denyer shares his Australia Day traditions ahead of concert.

Chelsea Handler blames the Kardashians for Donald Trump win

Chelsea Handler pictured in a scene from her talk show in Los Angeles.

TALK show host blames rise of reality TV family for election result.

Law & Order’s Trump inspired episode is still in limbo

The cast of Law & Order: SVU season 18, from left, Kelli Giddish, Raul Esparza, Mariska Hargitay, Ice-T and Peter Scanavino. Supplied by Channel 10.

SHOW'S mastermind unsure if or when twice-delayed episode will air.

Collapsed Coast company could owe up to $5 million

Staff, ATO, landlords among those out of pocket.

Ipswich block of dirt sells for $582 a square metre

JUST SOLD: A property on the Brookwater golf course sold for a record-breaking $612,000.

Property smashed 2007 record by close to $100,000

Sunday auction for historical home

Former Catholic school sure to attract spirited bidding

Looking back, looking ahead in Noosa

NEVER-ENDING GLORY: Looking towards Laguna Bay and Hastings St from Noosa National Park.

Natural appeal of Noosa continues to attract buyers

Thousands of jobs part of $1b retirement village project

THIS YEAR: An artist impression of the new Aveo retirement village in Springfield.

Aveo Springfield unveiled this month, homes ready by July

Ready to SELL your property?

Post Your Ad Here!