Your super is probably the second-largest financial asset you’ll ever have, after your home. It’s also the one most people under 40 completely ignore.

This makes sense psychologically. Retirement feels distant. The money isn’t accessible. The statements are confusing. So you file them and move on.

But the decisions you make (or don’t make) about super in your 20s and 30s have an outsized impact on your retirement balance because of compound interest. Small differences now create enormous differences later.

The Basics You Need to Know

Your employer contributes 11.5% of your ordinary earnings to super (as of 2025-26). This rate is legislated to increase to 12% by July 2025.

This money is invested on your behalf by a super fund. The default option is usually a “balanced” or “lifecycle” fund. The investment choice, the fees, and whether you have one fund or three all significantly affect your outcome.

One Fund, Not Three

If you’ve had multiple jobs, you probably have multiple super accounts. Each one charges fees. Small balances get eaten by fees over time.

Consolidating into one fund takes fifteen minutes through myGov. This single action can save thousands of dollars over your working life by eliminating duplicate fees and insurance premiums.

Before consolidating, check whether any existing fund has insurance you’d lose. Some people prefer insurance through their super fund, particularly if they have pre-existing health conditions that might make standalone insurance expensive.

Choosing the Right Fund

The two biggest factors in super fund performance are fees and investment returns. Both vary significantly between funds.

Fees. Industry super funds (AustralianSuper, Australian Retirement Trust, Hostplus, UniSuper) typically charge lower fees than retail funds attached to banks and financial advisers. The difference can be 0.5-1% per year, which compounds dramatically over decades.

On a $100,000 balance, a 1% fee difference costs you about $1,000 per year directly, plus the lost returns on that $1,000. Over 30 years, this can amount to $100,000+ in lost retirement savings.

Investment returns. Check your fund’s long-term returns (10+ years) against comparable funds. The government’s YourSuper comparison tool at ato.gov.au allows direct comparisons.

Past performance doesn’t guarantee future results, but consistently underperforming funds after fees are a red flag.

Investment Options

Most funds offer a range of investment options, from conservative (more bonds, less shares) to high growth (more shares, less bonds).

General guidance for younger workers: time is your biggest advantage. A high-growth option has more short-term volatility but higher expected long-term returns. At 25, your money has 40+ years of growth ahead. Short-term dips recover. Long-term returns compound.

As you approach retirement, shifting toward more conservative options reduces the risk of a market downturn hitting your balance right when you need it.

This isn’t financial advice — your specific situation matters. But the default option isn’t necessarily the right option for you.

Voluntary Contributions

Contributing extra to super is one of the most tax-effective savings strategies available to Australians.

Concessional (before-tax) contributions are taxed at 15% inside super, compared to your marginal tax rate outside super (which could be 32.5%, 37%, or 45%).

If you earn $90,000 and salary sacrifice $10,000 into super, you save about $2,250 in tax on that $10,000. The money then compounds inside super at a lower ongoing tax rate.

The concessional contribution cap is $30,000 per year (including your employer’s contributions). If you can afford to contribute extra, it’s usually worth considering.

Insurance Through Super

Most super funds automatically include life insurance, total and permanent disability (TPD) insurance, and income protection insurance.

These can be good value because group rates through super funds are typically cheaper than individual policies. But they’re also often default covers that may not suit your needs.

Review what insurance you have through super. Check whether the coverage amounts are appropriate for your situation. If you have a mortgage and dependents, you might need more. If you’re single with no dependents, you might be paying for coverage you don’t need.

The Bottom Line

Three actions that take less than an hour and could be worth tens of thousands of dollars over your career:

1. Consolidate multiple super accounts into one
2. Check your fees against industry averages
3. Review your investment option and insurance coverage

Your future self will appreciate the hour you spend on this. It’s the highest-return boring admin task you’ll ever do.