Accessible transcript – Watch your super grow

This is the accessible text transcript for Watch your super grow.

Introduction

What do you do with your money?

Make some key choices and discover the impact of your choices on your retirement lifestyle.

  • Are you a saver or a spender?
  • How much do you earn and what do you spend your money on?
  • Does saving matter?
  • Can saving small amounts now make a difference when you retire?

Are you making personal super contributions?

If you can afford it, you can add some of your own money to your super. Generally, returns earned within your super fund are taxed at a lower rate compared to the money you earn on other investments so that makes super a very good way to invest your money for the long term.

What lifestyle do you want your super to provide?

Right through life people make trade-offs. Should I buy new clothes or save for a car? Should I go to uni or start work? Should I go out or save to buy a house?

Even though your retirement may be far into the future, key decisions made now will affect the lifestyle you will have when you are old. What kind of lifestyle trade-offs are you prepared to make to have a comfortable retirement?

Quotes about saving money

  • Money grows on the tree of patience. (Proverb)
  • If you would be wealthy, think of saving as well as getting. (Benjamin Franklin)
  • The only way not to think about money is to have a great deal of it. (Edith Wharton)
  • The challenge of retirement is how to spend time without spending money. (Author Unknown)
  • The art is not in making money, but in keeping it. (Old Proverb)
  • The question isn't at what age I want to retire, it's at what income. (George Foreman)

Information about superannuation

Working and superannuation

When you start a new job, it's important to understand how superannuation works, and how decisions you make now and in the future, affect the lifestyle you'll have when you retire.

Employer contributions

When you start a job, you're usually entitled to have employer contributions paid into a super fund. These contributions build up so when you retire there should be enough money in the fund to live on.

You can generally choose which fund your contributions are paid into. It's worthwhile seeing which fund has the best features for you.

Personal contributions

You can also make your own personal contributions to your super fund. The government may make co-contributions based on your income and the amount you contribute.

Tax file number

By not providing your tax file number (TFN) to your employer and fund when you open a super account, all employer contributions (including any salary sacrifice contributions) will be taxed an extra 32%, which significantly reduces the growth of your money in the fund.

If your super fund does not have your TFN they will not be able to accept any personal contributions from you; so you would also miss out on any super co-contributions you may be eligible to receive.

Consolidating super accounts

If you have more than one super account, you may want to consider combining so you pay only one set of fees and costs. It also means you can keep track of your super more easily. Before you combine accounts check whether your fund charges exit fees.

Your task

Make super fund choices for three jobs during your career:

  • choose a super fund
  • decide if you want to supply your TFN
  • decide the amount of personal contributions you want to make while working in that job.

You can then calculate your super fund score.

Getting started: make super fund choices

Note down your choices, total up your score and see the effects your choices may have on your super fund.

Your first job

Choose the super fund for your first job

When you start working, your employer will need to make superannuation contributions into a fund on your behalf. Choose which fund you want the contributions to go into. You decide to:

  • use the default, employer-specified super fund, or
  • join a different super fund.

Make sure your fund has your TFN

If your super fund does not have your TFN, all employer contributions (including any salary sacrifice contributions) made to that account will be taxed an extra 32%, which will significantly reduce the growth of your money in the fund.

Your super fund will not be able to accept any personal contributions from you so you would also miss out on any super co-contributions you may have otherwise been eligible for.

You decide to:

  • not supply your TFN, or
  • supply your TFN.

Personal super fund contributions

Personal contributions are paid from your income after taxation. The government may make co-contributions based on your income and the amount you contribute.
You can only make personal super fund contributions if your super fund has your TFN.

Choose the amount of personal contributions you want to put into your super fund:

  • none
  • minimal (1% of net income)
  • moderate (5% of net income)
  • large (10% of net income).

Your second job

Choose the super fund for your second job

Choose which fund you want your employer superannuation contributions to go into. You can:

  • use the employer-specified fund (also known as the default fund)
  • join a new super fund for this job, leaving the other super fund accounts open
  • join a new super fund for this job, consolidating the other fund accounts into this one
  • continue with the same fund from the previous job.

Make sure your fund has your TFN

If you open a different super account and your super fund does not have your TFN, all employer contributions (including any salary sacrifice contributions) made to that account will be taxed an extra 32%, which will significantly reduce the growth of your money in the fund.

The super fund will not be able to accept any personal contributions from you so you would also miss out on any super co-contributions you may have otherwise been eligible for.

You decide to:

  • not supply your TFN, or
  • supply your TFN.

Personal super fund contributions

Personal contributions are paid from your income after taxation. The government may make co-contributions based on your income and the amount you contribute. You can only make personal super fund contributions if your super fund has your TFN.

Choose the amount of personal contributions you want to put into your super fund:

  • none
  • minimal (1% of net income)
  • moderate (5% of net income)
  • large (10% of net income).

Your third job

Choose the super fund for your third job

Choose which fund you want your employer superannuation contributions to go into. You can:

  • use the employer-specified fund (also known as the default fund)
  • join a new super fund for this job, leaving the other super fund accounts open
  • join a new super fund for this job, consolidating the other fund accounts into this one
  • continue with the same fund from the previous job.

Make sure your fund has your TFN

If you open a different super account and your super fund does not have your TFN, all employer contributions (including any salary sacrifice contributions) made to that account will be taxed an extra 32%, which will significantly reduce the growth of your money in the fund.

The super fund will not be able to accept any personal contributions from you so you would also miss out on any super co-contributions you may have otherwise been eligible for. You decide to:

  • not supply your TFN, or
  • supply your TFN.

Personal super fund contributions

Personal contributions are paid from your income after taxation. The government may make co-contributions based on your income and the amount you contribute. You can only make personal super fund contributions if your super fund has your TFN.

Choose the amount of personal contributions you want to put into your super fund:

  • none
  • minimal (1% of net income)
  • moderate (5% of net income)
  • large (10% of net income).

Score your super choices

Starting score: 20 points

Did you supply your TFN for all three jobs?
Add 10 points to your score.

Did you stay with the same super fund for all three jobs or consolidate your super fund in job 2 and job 3?
Add 10 points to your score.

Personal contributions in job 1

You made contributions of 1% of net income.
Add 2 points to your score.

You made contributions of 5% of net income.
Add 10 points to your score.

You made contributions of 10% of net income.
Add 22 points to your score.

Personal contributions in job 2

You made contributions of 1% of net income.
Add 2 points to your score.

You made contributions of 5% of net income.
Add 10 points to your score.

You made contributions of 10% of net income.
Add 22 points to your score.

Personal contributions in job 3

You made contributions of 1% of net income.
Add 2 points to your score.

You made contributions of 5% of net income.
Add 10 points to your score.

You made contributions of 10% of net income.
Add 22 points to your score.

Your superannuation score

Min Max  
1 point 35 points You are not saving enough! Based on the choices you have made, you will not have enough money for your retirement and you will have to rely on the Government age pension. You will need to contribute more money into your super fund over your working life.
36 points 65 points You should try and save more. Based on the choices you have made, you will have minimal money for your retirement. You should try and contribute more to super over your working life.
66 points 100 points Your super savings are on track! Based on the choices you have made, you should have sufficient money for your retirement.

Reflect on your choices

Think about the decisions you made using one or more of the following as starting points:

  • I was surprised to find out that ...
  • The most interesting thing was ...
  • I'd like to know more about ...
  • Fact 25

    The first computers used by the ATO were used primarily for issuing the five million refund cheques sent out each year in the mid 1960s.

Complying super fund

A super fund that meets government laws and regulations.

read more glossary terms