Gen Z - Super Interested in Superannuation
- youthforceau
- Jun 20, 2024
- 4 min read
Maximising Superannuation for Gen Z: Tips for Financial Freedom
You would think with the “materialistic”, “ignorant” and “un-resourceful” backlash our generation gets that to get us to think about our super would be an absolute chore.
But being the “Super- Cheerleader” that I am, I gave it a crack.
Nearly 1 million views a 7 news and Yahoo finance article later - It is safe to say, I don’t think there is a generation more interested!
To me, this interest makes sense. Gen Z understands the ONE thing we on every other generation (besides those baby alphas).
TIME - and we are not afraid to capitalise on it!
For those not yet onboard with the super train here are some reasons to care in your 20’s.
The Magic of Compounding Interest
No magician was ever greater. Interest is earned on both your initial contributions and the interest that is added over time. And the philosophy is simple.
The earlier you start = the more money you will have later!
Being in our 20’s can mean part-time work, off jobs and inconsistent pay. These reduced pay-checks are not all bad, as it means we are eligible for the $500 government co contribution.
If you earn under $42,000 and you make a contribution of $1000 into your super, the government will make a co-contribution of $500.
Understandably the financial pressures of earning under $42,000 may mean this is not a possibility for you. But if there is one bright side of earning less cash our elders - this is it!
Future financial freedom
The flexibility of working from home has shown us that Gen Z values freedom.
This is exactly the product of super, as it works to give us future financial freedom! As we close our eyes and envision our ideal retirement state, it is with the power of super that we are able to dream a bit bigger. Upgrading that flight to businesses, and popping open a bottle of Madame Cliquot besides the Aldi special.
Your Employer is already lending a hand
As we know our employer contributes 11% of our earnings to our super each pay-check. This number is about to go up to 11.5% from July the 1st which is why it is more important than ever to understand super.
There are 2 things you can control in order to ensure your hard earned cash is working for your future, and not getting held back by unnecessary expenses.
Consolidate your super
Pick the right super fund
Consolidating your super.
As we navigate various jobs in our 20s, our superannuation contributions can end up in multiple funds, each chosen by different employers. This scenario, where your money is spread across more than one "nest," poses challenges. Each fund requires maintenance and management, leading to multiple fees that can eat into your investments.
Fortunately, there's a straightforward solution. Consolidating your super funds is easy if you have more than two accounts. Your chosen super fund can help you merge your accounts, ensuring your money works together to earn the best possible return.
Most super funds offer a tool where you can type in your Tax File Number (TFN) to find extra cash from previous jobs. With just a few clicks, you can combine it all into one fund. Since fees are usually charged quarterly, it's crucial to act now. By consolidating your super funds, you can minimise fees and maximise growth.
Pick the Right SuperFund
The days of limited superannuation options are long gone. While I am not a financial advisor, I can assure you that there are many options available to suit your values, needs, and interests. Once you choose a fund, you can often tailor your investments accordingly.
Selecting the right super fund can be simplified by considering these key steps:
1. Assess Your Needs and Values
Investment Options: Choose funds that offer investments aligned with your interests, like green energy or technology.
Ethical Considerations: If ethical investing is important, look for funds focused on socially responsible investments.
2. Compare Fees and Performance:
Fees: Lower fees can significantly boost your savings over time.
Performance: Check historical performance for an idea of fund management success.
3. Consider Additional Features:
Insurance: Some funds offer life, disability, and income protection insurance.
Member Services: Evaluate customer service and online tools for convenience.
4. Use Comparison Tools:
Online tools can help you compare fees, performance, and features of different funds. Here are a few I enjoy!
5. Read Reviews and Seek Advice:
Reviews: Check member reviews for satisfaction insights.
Professional Advice: Consult a financial advisor for personalised guidance! P.S I am not one of those x
It is so exciting that our generation is caring about our super! I believe it is a testament to financial advisors not gatekeeping the facts and information becoming more accessible.
So do what you need to do with this information - and if you are keen to find out how to get the $500 government super contribution before July 1st. Here is how!
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