Are you getting the most out of the July super boost?
Did you know that from 1 July 2024, the superannuation guarantee rate increased from 11% to 11.50%?
While this might not sound like a huge change, it’s worth paying attention to.
Over your working life, your employer pays super at the super guarantee rate (SG), which will make up the bulk of most Australians’ retirement balances.
So, any increase in this rate means more of your income automatically goes towards your super, and your retirement savings get a boost without you having to lift a finger.
For example, for an Australian worker with an average salary of $98,218, the increase to the SG rate means an extra $490 per year straight into their super account.
You might be thinking, ‘That doesn’t seem like much’. But, what looks like a small change on paper can actually make a huge difference to your balance at retirement.
What difference could the SG rate increase make to your retirement balance?
According to superannuation provider AustralianSuper , a 25-year-old male, new to the workforce and earning $78,000 a year would have an extra $26,000 in his super by the time he retires at 67.
In another example, a 40-year-old woman with $84,000 currently in her super account, and earning $76,000 a year would have an extra $13,000 in her super by the time she retires, thanks to the increase.
Super Members Council CEO Misha Schubert says the SG rate increases are key to delivering the quality of life that retired Australians deserve.
“In retirement, this money will fund extra basics – or perhaps a trip away, dinners out, the ability to spoil the grandkids, or even a bit more financial freedom and peace of mind,” she said.
What else can you do to boost your super?
If you want to boost your super balance even further, you may be eligible to make additional super contributions on top of the SG rate. These include:
- Salary sacrificing
- Tax-deductible personal contributions
- Tax-friendly contributions for low or high-income earners
- Property downsizing contributions
- First Home Super Saver Scheme (FHSSS)
- Super Co-Contribution Scheme
- Spousal contributions.
But it’s also important to regularly compare superannuation funds to see if you could switch and save on fees, or make the most of a better-performing fund.
When you compare super funds, look at their 5 to 10-year performance, super fees, investment options, access to financial advice services, and the insurance options they offer. Here’s a look at some options to consider:
Compare superannuation funds
Spaceship Super
- Choice of growth or Index fund option
- Simple fee structure
- Digital dashboard to help you see where and how your super is invested
Spaceship Super first launched in 2017, and says that above all else it’s focussed on building long-term value for its members. This is why the fund’s options are primarily suited to people who are looking to save for retirement for at least the next 10 years, or longer. Members have a choice of the GrowthX option, which has a focus on Global technology companies, and the Global Index option which passively invests in growth assets, particularly international shares. Both options have a competitive performance track record according to Spaceship (based on annualised performance since inception) and have a simple fee structure.
Spaceship Super’s digital platform helps you to keep track of your balance, and also gives you visibility of where and how your super is invested. If you’re saving for your first home, you can also set up a first super saver account.
To learn more: Visit Spaceship Super website >>
Australian Retirement Trust
- One of Australia’s largest super funds with 2.3 million members and over $280 billion in retirement savings
- Profits for members
- Focused on strong long term investment returns and lower fees
- Exclusive member deals and discounts
The Australian Retirement Trust (ART) is one of Australia’s newest super funds formed out of the merger of Sunsuper and QSuper. ART is open to all Australians, works for members and not shareholders, which means its focus is on lower fees and better value products and services. It has a range of investment options depending on your risk appetite and lifestage and offers members rewards including exclusive discounts at retailers.
Membership also includes personal financial advice about your super accounts with them and eligible members are also provided with automatic Death and Total & Permanent Disability Assist cover. Tailored cover is also available (T&Cs apply).
To learn more: visit the Australian Retirement Trust website >>
Host Plus Super
- Industry super fund, profits go to members, not shareholders
- Over 1.77 million members and $103.7 billion in funds under management
- Strong investment performance over past 20 years together with low fees
While Hostplus’ origins are from the hospitality and tourism industry, it is now available to all Australians. As an industry fund, profits go back to members and it invests in projects that aim to derive strong investment returns for its members. It also aims to keep its fees and costs as low as possible. It has an option for members who want more control to make direct investments or you can also opt to let Hostpluses experts take care of your investments for you.
Hostplus also offers a range of insurance options (some automatic for eligible members), as well as financial planning and super advice to help you set and meet your retirement goals. Some advice may incur fees based on the level of advice.
UniSuper
- Record of strong long-term performance across a range of investment options with 615,000 members and $124 billion in funds under management.
- Fees among the lowest in the industry
- Responsible investor - Environmental, Social and Governance (ESG) factors are considered across its major investment holdings
- No commissions to advisers or profits to shareholders, member first fund
UniSuper is open to all Australians, though it built its reputation as the industry fund for the higher education sector. It has a record of strong long term investment performance (though this isn’t an indicator of future performance). According to recent Member Outcome Assessments, UniSuper promotes the best financial interests for its members and has some of the lowest administration fees in the industry. UniSuper champions responsible investment and its ESG approach includes direct engagement with companies on ESG issues as well as offering its members environmental and sustainable options to invest responsibly.
General advice about super and pensions is included as part of your membership but there are also paid advice services which vary in cost depending on the level of advice required.
Virgin Money Super
- Earn Velocity points on contributions and any funds rolled over (T&Cs apply)
- Strong performing investment fund
- Fees among the lowest in the industry for the Lifestage Tracker Option
- Simple super advice at no additional cost + automatic Death and Total Permanent Disablement cover
Virgin Money Super is a retail superannuation fund available to Australians and backed by Mercer Super, who has been providing superannuation related services to Australians for over 40 years. It offers a range of investment options from a fully managed Lifestage Tracker that does the investment work for you, to a choose your own investment mix option that gives you the opportunity to invest your money where you’re most comfortable. One Velocity Frequent Flyer Point will be awarded for every $5 of Net Super contribution during the Points Earn Period and the maximum number of Velocity Points in any financial year is 250K.
Virgin Money Super also provides automatic Death and Total Permanent Disablement cover and includes additional insurance options. Members can also get simple super advice over the phone from a qualified financial adviser at no additional cost.
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