Millennials manage super for future security

Columnist Hannah Tattersall shares practical tips for saving money into super no matter what your salary.

By Hannah Tattersall - 3 mins 30 secs read

A little about Hannah

Hannah Tattersall writes about a range of topics, including personal finance, money and business.

I was surprised to learn recently that millennials were actually the first generation to enter the workforce with compulsory superannuation in place.¹ Not only did this make me feel old—wasn’t Australia’s superannuation visionary, Paul Keating, Australia’s treasurer decades ago?!—it also made me think hard about my future. Now into my 40s, retirement seems a lot closer than it did a few years ago.

In fact, the superannuation guarantee (SG) began in Australia in 1992, following a famous lunch between then treasurer Paul Keating and his chief of staff Don Russell, who later became head of Australia’s biggest industry fund. That meeting, over tandoori chicken, is the key reason Australians now have 11.5 per cent of their wages paid into super, increasing to 12 per cent by 2025.

Superannuation guarantee rates

Period	Super guarantee (%)
1 July 2002 – 30 June 2013	9.00
1 July 2013 – 30 June 2014	9.25
1 July 2014 – 30 June 2015	9.50
1 July 2015 – 30 June 2016	9.50
1 July 2016 – 30 June 2017	9.50
1 July 2017 – 30 June 2018	9.50
1 July 2018 – 30 June 2019	9.50
1 July 2019 – 30 June 2020	9.50
1 July 2020 – 30 June 2021	9.50
1 July 2021 – 30 June 2022	10.00
1 July 2022 – 30 June 2023	10.50
1 July 2023 – 30 June 2024	11.00
1 July 2024 – 30 June 2025	11.50
1 July 2025 – onwards	12.00

Source: ATO

Despite being the first generation to have compulsory super contributions—or, perhaps because of it—millennials are often regarded as being less attentive and less confident about managing their super, at least compared to other generations.

Research conducted by ASIC’s Moneysmart found1: almost one in two (48%) millennials surveyed were not very or not at all knowledgeable about maximising their super, while three in 10 (31%) millennials checked their superannuation fund performance less than once a year—or not at all.

But while saving for retirement is a long-term goal, maximising our super is something we really should be thinking about more than once a year. It’s not an annual medical check: it’s something that requires regular attention.

In our 20s and 30s, retirement seems so far away. I always thought, ‘One day, I'll make good money and contribute more to super’.

Well, it appears ‘one day’ has come! No, I'm not earning a significantly higher salary, but I am one step closer to retirement and retiring with enough money to see me through is more front of mind than it used to be.

The truth is, no matter your income level—or your age—there are simple strategies you can use to boost your super. As I discussed in my previous column , prioritising saving today will help set you in good stead for the future. Here are a few ways to get started:

Make voluntary contributions

Even if you’re on a modest salary, setting aside a small percentage of your income to pay directly to your super fund can have a significant impact over time. Contributing to superannuation remains one of the most tax effective strategies we have to build wealth.

One way is to contribute from your after-tax pay—these are called non-concessional contributions because the money’s already been taxed. You can put in up to $120,000 per financial year this way. In some cases, you might be able to get a tax deduction on non-concessional contributions. Just remember, if you plan to claim a deduction, you’ll need to notify us by filling out the ATO’s claim form² first.

Take advantage of salary sacrifice

Many employers offer what’s known as salary sacrifice (also called concessional contributions), where you agree to have a portion of your pre-tax income paid directly into your super fund rather than taking the money on payday. It could be as little as $20 a month—the cost of a few coffees a week—to help build retirement savings in a tax-efficient way. These contributions are taxed in the super fund at a rate of 15%, which is generally less than your marginal tax rate.

Check if you’re eligible for the government co-contribution

If you earn less than $60,400 a year, the government will match any extra contributions you make to super by doubling the amount you contribute, up to a set limit. For example, for someone earning $35,000 a year and paying $40 a fortnight (or $1,040 a year) into their super account, the government will co-contribute $500.

Consider contributing government assistance

The Commonwealth Government recently announced what’s known as the National Energy Bill Relief, granting all households up to $300 to help with electricity costs in the 2024-25 financial year. If you don’t need this extra help right now, you could consider putting the amount you save from reduced energy bills into your super, allowing returns to compound for the future.

Whatever you decide, remember every little bit helps. And, hopefully, the next time you check your super account, you’ll feel like you’re taking control of your future.

¹ Setting up millennials for super success, Roundtable summary report, September 2024
² The form is called the Notice of intent to claim or vary a deduction for personal super contributions. Both the form and instructions are available on the ATO website.

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The views and opinions expressed in this article are those of the author and do not purport to reflect the views and opinions of Russell Investments.

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