First job? A beginner’s guide to super

Congratulations on landing your first job! Before you start work, it’s important to understand how super will play a part in your life once you stop work. Here’s some of the superannuation essentials to get you started in the workforce.

What is Superannuation?

Superannuation, or 'super' is a system designed in Australia to help you save for retirement. It’s one of your most valuable assets and most working Australians have a super account. Super is money that is put aside, and saved in a fund that will grow^disclaimer over your working life. It is part of the Australian pension system designed to give you a regular income once you stop earning a wage.

The Superannuation Guarantee means your employer pays an amount equivalent to 11 per cent of your annual salary (FY2023/24) into your super account throughout your working life. The super guarantee rate is scheduled to progressively increase until it reaches 12% from 1 July 2025.

You can also top up your super through your own contributions, and there are tax incentives for contributing extra via salary sacrifice or personal contributions. Having a good super account which doesn’t charge high fees, helps you make the most of the money you’ve worked so hard for.

Can I get paid superannuation?

The short answer is yes. If you’re working in Australia, you are generally entitled to receive superannuation contributions from your employer to your chosen super fund.

• If you're employed by a company and over 18 years, your employer must make contributions to your super on your behalf, regardless of how much you are paid.
• If you're under 18, you are eligible to receive super if you work more than 30 hours a week.

There are some exceptions though. You can confirm your eligibility for the Superannuation Guarantee with the ATO's 'Am I entitled to super?' tool

How does superannuation work?

The term 'superannuation' might be an unfamiliar one, as Australia is the only country that uses it. In other countries, it's usually known as 'pension'.

Superannuation is managed by a fund, which is an organisation that can hold, manage and invest your super until you can access it.

Through regular contributions to the fund, your superannuation is steadily topped up. The money in your super is then used by your super fund to invest in things like property or shares. The idea behind this is to provide returns on the money sitting in your account, with the goal of growing your balance over time to an amount which can help fund your retirement.

If you're looking to put more money into your super on top of the mandatory Superannuation Guarantee payment from your employer you can also make extra contributions, but keep an eye on your contribution caps.

Generally speaking, super can only be accessed upon retirement (if you are, or become a permanent resident or citizen of Australia) or when you leave Australia (if you're on a Working Holiday visa, Student visa or another temporary visa).

To get your questions on getting started with super started, you can head to our superannuation learning centre.

If you need to learn the super lingo, you can also read our guide to technical and defined terms for super which also has some handy links to websites that will help you get started on your journey to the retirement lifestyle you want

I know I’ve just started working, but how much will I need to retire?

The ASFA Retirement Standard provides a picture of how much a modest retirement lifestyle costs compares to a comfortable lifestyle and how much you're likely to need to have saved up to maintain each of these two standards of living.

A comfortable lifestyle includes extra items that are considered to be 'comforts', such as updating the kitchen or bathroom, having private health insurance at the top level of cover and enjoying an occasional holiday.

Using an online calculator, you can generally estimate:

• what income you're likely to get from super when you retire
• how contributions, investment options, fees and retirement age affect your retirement income
• how working part-time or taking a break from work affects your super balance

Even though it’s decades away preparing for retirement is a big milestone, and with many different options available, this ANZ LifeGuide will help give you an overview of some of the key things you’ll need to do to make the transition from work to this new chapter of your life as smooth as possible. It’s never too early to start thinking about the life you’d like to have in retirement, and planning and putting away for it now is something your future self will thank you for.

There’s plenty of free and available resources out there to help you work this out. You can also easily use MoneySmart’s retirement planner tool to estimate your retirement income using funds drawn from super as well as the Age Pension.

If you’re an ANZ Smart Choice Super member, you can access the ANZ Smart Choice Retirement Estimate by logging in to your Smart Choice Super account via ANZ Internet Banking. For members without access to their account online, call us on 13 12 87 and we can help.

When can I access or withdraw my superannuation?

It’s great that you have started your first job, and you are already thinking about retirement! It means you are investing for your future. Did you know that every contribution to your super now, is a step towards a more comfortable retirement down the line. For people newly joining the workforce now, it means that in a few decades when you’re ready to hang up your boots, you’ll be eligible to either withdraw your super when you turn 60 and retire, or when you turn 65 if you want to keep working!

There are a small number of other instances where (subject to eligibility) you may be able access your super, known as a “condition of release”.

If your future financial goals include owning your first home you may also be able to use the super system to help save for a home deposit. This means you can withdraw your super before you retire, if you use it to buy and live in your first house.

The First Home Super Saver (FHSS) scheme allows you to save for your first home within your super using additional funds that you have contributed (you cannot use employer or “SG” contributions). Currently, you can make voluntary contributions of up to $15,000 a year to your super specifically for the purpose of buying and living in your first home. When you’re ready to buy, you can withdraw up to $50,000 as an individual or $100,000 per couple to help buy your first home, sweet, home. You can learn more about the scheme here.

What is the super guarantee rate?

The Superannuation Guarantee means your employer pays an amount equivalent to 11 per cent of your annual salary (FY2023/24) into your super account throughout your working life.

The super guarantee is scheduled to progressively increase until it reaches 12% from 1 July 2025.

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You can confirm your eligibility for the Superannuation Guarantee with the ATO's 'Am I entitled to super?' tool. If you suspect your super is not being paid correctly, you can obtain an estimate of what you should be receiving using its 'Estimate my super' calculator.

Here’s our tips on how to check your employer is paying super and what your next steps and rights are.

How do I make extra contributions to my super?

Even though retirement may seem so far off to already be thinking about, it’s good to start planning for it now. Time is on your side when it comes to the power of compound interest. It’s never too early to start thinking about making extra contributions – even your first pay! If you have an ANZ Smart Choice Super account, here’s how to easily make an extra contribution

1. Log in to your ANZ Smart Choice Super account by either:
   - ANZ Internet Banking and selecting your linked superannuation account; or
   - If you don’t hold an ANZ Bank account, you can log into your super account directly via www.anz.com/smartchoiceaccess
2. Once you’ve logged in, click on the 'Manage my account' tab. Then, click on the 'Make extra contributions' link from the left-hand side of the screen to access BPAY Details.

Want to reach your financial potential in retirement?

We hope you understand a bit more about the basics of what superannuation is and how it works. If you want to learn more about the ins and outs of your super, what you're entitled to and what you can do now to grow your super you can check out our learning centre which has lots of helpful articles for every stage of your working life.

Remember these 10 steps to get in control of your super

Here are our top 10 tips to remember when it comes to superannuation and how it can help you get in control of your financial freedom. There are plenty of free and online resources available that are general in nature, and do not take into account your personal objectives, financial situation and needs. If you would like personal financial advice about your superannuation, you should consider speaking with a qualified financial adviser.

1. Superannuation is help fund your lifestyle after you finish working. You should think about how much you’ll need in retirement and start planning now, and revise often, for how to get there.
2. You can choose your own super fund or your employer’s default fund. You can also change super funds whenever you want. Think about finding a super fund that is accessible and has low fees.
3. Your employer is required to make contributions to your super fund in addition to your salary. Check your super regularly to ensure you are receiving yours.
4. Super funds invest your contributions (money) for you in a range of ‘asset classes’ to help grow your balance over time. Consider what the best investment mix is for you.
5. Super funds may offer different investment options (from conservative to growth) with varying levels of risk and return. Think about how comfortable you are taking risk and how long you have until your retirement.
6. It's important to regularly check and monitor your super fund's performance. Funds usually publish investment return results at each quarter end.
7. You can make additional voluntary contributions to boost your super savings. Consider if pre-tax or after-tax contributions are right for you.
8. There are tax benefits associated with contributing to your super fund, but make sure you keep an eye on your contribution cap by checking your contributions in your fund.
9. Super is a long-term investment, and starting early can have a significant impact on your retirement savings.
10. It's essential to keep your super fund details up to date, particularly if you change jobs, personal information or you want to nominate a new beneficiary.