Best superannuation for under 18s

Why should you pick a super fund?

In Australia, choosing or not choosing a super fund is a significant financial decision. Most people are eligible for super, and their employers are required to contribute a minimum amount into a super fund.

You have the option to choose which super fund your employer pays your contributions to. If you don't choose, your employer will pay into either your existing super fund (stapled super fund) or their default super fund.

Choosing your super fund provides benefits like:

• Greater control
• Potential for better returns
• Lower fees
• The ability to tailor insurance and investments.
• Allows alignment with your ethical values.

In contrast, the default fund may not suit your goals or values. Therefore, this decision is essential for securing your retirement savings.

"If I told you at aged 18 that you could become a millionaire, you'd pay attention! Really, that's what your superannuation is: think of it as a bank account for future you...and by making as many contributions to your super, as early as you can, it is entirely possible to retire with over $1 million.

At 18, you have around 50 years of contributing to your super account before retirement. Your other advantage is that you have have fewer expenses and responsibilities compared to when you're older; so you should be saving as much as you can now for future you. "

Pascale Helyar-Moray

Superannuation expert

Who is eligible to get paid super?

Superannuation guarantee contributions are obligatory for nearly all Australian workers, regardless of their employment status.

You are eligible to receive super contributions, if you are:

• working full-time, part-time, or even casually
• under 18 years old but work 30+ hours per week
• receiving a super pension or annuity while actively working, including employees on a transition to retirement arrangement
• Temporary residents, such as backpackers, also qualify, as do company directors and family members working in a family business.

In essence, the vast majority of employees are entitled to super contributions, making it an essential component of your financial well-being.

How to compare the best super fund for under 18s

When you're just starting your journey in the workforce, securing your financial future may not be top of mind. However, choosing the right superannuation fund is a crucial step towards ensuring a comfortable retirement.

Let's walk you through the process of comparing super funds tailored to young individuals.

• Fees: Look for funds that have lower fees. Ideally 1% is something to consider.

• Performance: Examine the historical performance of the funds. Evaluate their returns over the past 1, 3, 5, and 10 years. Keep in mind that past performance doesn't guarantee future results, but it can provide insights into how well a fund has been managed.

• Customer service and accessibility: Assess the level of customer service and accessibility provided by the super funds. Consider factors like online account management, customer support, and user-friendly interfaces.

• Company reputation: Look at customer reviews and forums to find out other people's experiences with a super fund to get an idea of their reputation. Awards such as the Finder Awards can be a great place to get an idea of this, too.

• Consider personal goals: Your choice should align with your long-term financial goals. If you plan to retire early or have specific financial or sustainability objectives, choose a fund that supports those goals.

• Compare super fund rankings: Utilising resources like Finder, you can access detailed information and rankings of the best performing super funds, including their fees, performance, and features.

Example case study: Alex finds a super fund

For instance, consider this example to understand it better - Alex, a 35-year-old marketing manager, had been diligently contributing to his superannuation fund over the years. He already had a balance of $30,000 in his super fund, but he noticed that the fund was charging high fees of 2.8%.

After conducting some research and considering his long-term financial goals, Alex decided to make a smart move. He switched to a different superannuation fund with significantly lower fees, at just 1.2%.

By making this strategic change, Alex is on track to boost his retirement savings substantially. At the age of 65, he will have an estimated $65,000 more in his super fund. Instead of ending up with $275,000, his super account balance is projected to grow to a more comfortable $340,000.

This decision to switch to a low-fee super fund has set Alex on a path to a financially secure retirement, ensuring he can enjoy his golden years with peace of mind and a more substantial nest egg.

Tips: To evaluate the best super fund for the under 18 age group, focus on three key factors:

• Low fees: Annual fees below 1.5% of your balance are generally considered to be on the low side.
• High returns: Look for high long-term performance returns over the past 7-10 years (10-year average returns over 7-8% p.a. are quite strong).

If you need a bit more help, our best super fund picks could be a good place to start. Given the focus by younger people on responsible investing, you may also want to consider investing in ethical super funds.

What should I do if my employer has not paid super?

Recent research by Industry Super Australia has uncovered a concerning trend: Australian workers have missed out on a staggering $33 billion in unpaid superannuation over the past seven years. This equates to an annual loss of $4.7 billion in superannuation payments.

One key reason for this underpayment issue is the misalignment between superannuation payment frequencies and wage payment schedules. The law requires super contributions to be made at least quarterly, but most employees are paid on a more frequent basis (weekly, fortnightly, or monthly).

This mismatch makes it challenging for workers to detect underpayments, leading to a pressing call for government intervention to mandate super payments at the same frequency as wages. This change would ensure that workers receive their entitled superannuation contributions promptly and without complications.

Therefore it becomes even more important to check on your super contributions. If you are concerned you are not receiving your correct super payments or just want to make sure you're receiving what is owed to you, you check your payments by logging onto the ATO's online portal.

Finder survey: How familiar are Australians with the different types of super funds available?

Frequently asked questions

• What is Superannuation?

  Superannuation, often referred to as "super," is a mandatory savings plan for Australian workers. It serves as a financial safety net for retirement, even though retirement might seem like a distant future for young people just starting their careers.

  Your superannuation is a fund where a portion of your earnings is saved for your retirement, and it's managed on your behalf. In essence, it's a way to ensure that you have financial security and peace of mind when you eventually retire.

  As a matter of fact, according to Finder data, almost 7 in 10 Australians have a super fund. This shows the importance of having an allotted super fund.

• What is super guarantee?

  The super guarantee is the minimum percentage of your annual earnings that your employer is required to contribute to your super fund. Currently set at 11.50%, this percentage ensures that a portion of your income is set aside for your retirement savings. It's important to note that this figure will gradually increase over the next few years until it reaches 12% in 2025, providing even more financial security for your retirement.
  Your employer is responsible for managing these superannuation contributions on your behalf, paying them into your chosen fund each quarter. The super guarantee is a valuable part of your financial future, helping you build a nest egg for your retirement years.

• What should I know about tax before starting work?

  All working Australians are required to lodge a tax return with the Australian Tax Office (ATO) each year. Read the guide on how to lodge your tax, plus more resources to help you complete your tax return.

• When can you access your super?

  For under 18s, when you hit 60. You can generally access your super when you reach your "preservation age" and retire, or when you meet other specific conditions. The preservation age depends on when you were born:

  - Before July 1, 1960: 55 years old
  - July 1, 1960 – June 30, 1961: 56 years old
  - July 1, 1961 – June 30, 1962: 57 years old
  - July 1, 1962 – June 30, 1963: 58 years old
  - July 1, 1963 – June 30, 1964: 59 years old
  - After June 30, 1964: 60 years old

  You can also access your super if you reach age 65, regardless of whether you are still working. Additionally, there are other conditions under which you might be able to access your super earlier, such as severe financial hardship or certain medical conditions.

• How can I grow my super fund balance?

  To grow your superannuation (super) fund balance, young individuals can take several steps. Regular contributions, whether through employer contributions, personal contributions, or salary sacrifice, provide a solid foundation. Exploring government co-contributions and consolidating multiple super funds to reduce fees are also smart moves. Reviewing and adjusting investment options for growth, minimising fees, and ensuring appropriate insurance coverage are key factors.

  Additionally, maximising employer contributions, making extra contributions when possible, and periodic reviews of fund performance keep the super balance on track. Planning for the long term and seeking professional advice when needed are crucial for securing a robust super fund balance for retirement.

• How can you make the most out of your bank account?

  To make the most of your bank account, especially as you embark on your career and save for goals like travel, a car, or trips, it's essential to select the right account that aligns with these objectives. Budgeting, automating savings, and leveraging technology are key strategies for effective financial management.

  Choosing accounts with low fees, competitive interest rates, and travel-related benefits can further enhance the banking experience. Building an emergency fund and managing credit card balances responsibly are also vital steps. Regularly reviewing account options and switching if needed ensures that your bank account is a valuable tool in achieving your financial aspirations.
  Ryan is the founder and CEO at Tribeca Financial, a financial advice firm that listens, learns and then gets you on track. He's an accomplished financial advisor and financial wellbeing coach with over 15 years of experience

To make sure you get accurate and helpful information, this guide has been reviewed by Pascale Helyar-Moray, a member of Finder's Editorial Review Board.

Written by

Alison Banney

Editorial Manager, Money

Alison is an editor at Finder and a personal finance journalist with over 10 years of experience, having contributed to major financial institutions and publications such as Westpac, Money Magazine, and Yahoo Finance. She is frequently quoted in media outlets like SmartCompany and SBS, offering expert insights on superannuation and money management. Alison holds a Bachelor of Communications in Public Relations and Journalism from the University of Newcastle, and has earned three ASIC RG146 certifications in superannuation, securities and managed investments and general financial advice, ensuring her expertise is fully aligned with ASIC standards. See full bio

Alison's expertise

Alison has written 653 Finder guides across topics including:

• Superannuation
• Savings accounts, bank accounts and term deposits
• Budgeting and money-saving hacks
• Managing the cost of living