If you're in your late teens or early twenties, superannuation might feel like something to think about later. But what if we told you that understanding super now could help Future You retire with a much bigger nest egg? In this blog, we’ll explain what superannuation is, how it works, and why students and young professionals should care.
What Is Superannuation?
Superannuation (or “super”) is a retirement savings system in Australia. When you work and earn above a certain amount, your employer is required to contribute money into a super fund on your behalf. These contributions are investedand grow over time, helping to fund your life after retirement.
You generally can't access your super until you reach a certain age (known as the preservation age) and retire. But even though you can’t touch it yet, the way your super grows now makes a big difference later.
How Does Super Work?
As of July 2025, the superannuation guarantee rate is 11%. That means if you earn $1,000 in a month, your employer must pay $110 into your super fund — in addition to your wages.
This contribution is compulsory if:
You’re over 18 and earn more than $450 in a month
Or you’re under 18, work more than 30 hours a week, and earn over $450
Super funds then invest your money in a mix of assets like shares, property, and bonds. Your balance can grow through:
Employer contributions
Investment returns
Voluntary contributions (if you choose to top it up yourself)
Why Does Super Matter in Your 20s?
Because of compound interest, even small amounts added to your super in your 20s can snowball over time. The earlier you start, the more time your money has to grow.
For example, starting with just $1,000 at age 20, and earning an average 5% annual return (with no additional contributions), you’d have over $7,000 by age 60. Add more over time and the numbers increase significantly.
It also helps you:
Avoid lost super accounts when changing jobs
Choose the right fund with low fees and good performance
Start building wealth passively without even noticing
How to Check and Manage Your Super
You can view and manage your super by linking your ATO account to MyGov. This lets you:
See all your super accounts
Consolidate multiple funds into one (to avoid paying multiple fees)
Update your personal details
Track employer contributions
Choosing a Super Fund
Most jobs will automatically set you up with a default fund. But you can choose your own fund if you prefer. Key things to consider when comparing funds:
Fees
Investment options
Past performance (although not a guarantee of future performance)
Insurance options
Super for Freelancers and Gig Workers
If you’re self-employed or earning money through platforms like Uber, DoorDash, tutoring, or freelancing, you may not receive employer-paid super. However, you can still make voluntary contributions to your fund.
Voluntary contributions are not compulsory, but they help you stay in the game and may be eligible for government co-contributions.
Final ThoughtS
Super might feel distant, but it’s happening now — whether you’re paying attention or not. Understanding it in your 20s gives you an advantage most people don’t have: time. That time can translate to a more comfortable retirement, more options, and financial independence in the future.
So next time you glance at your payslip, don’t ignore the “super” line — it's money for Future You.
Financial Disclaimer: This article is for informational purposes only and is not financial advice. Always consider seeking guidance from a licensed financial adviser or tax professional if you have questions about your superannuation or financial situation.