When you're in the early years of your career, it's easy to overlook the importance of superannuation. After all, retirement can seem a lifetime away, and your super can be , out of sight, out of mind – and it’s locked away for decades.
You're likely to be focused on establishing your career, seeking new experiences, and enjoying life too much to worry about a retirement that feels like it might never happen!
While this perspective is understandable, there are compelling reasons why you should prioritise your long-term financial security and develop healthy savings habits while young.
In Australia, women accumulate significantly less super than men on average. According to statistics published by the Association of Superannuation Funds of Australia (ASFA)1, this disparity begins at a young age, with women aged 30 to 34 having an average super balance of $40,479, compared with $48,603 for men of the same age. This represents a difference of over 20%, and for many women, the gap only widens over time.
Multiple factors contribute to this discrepancy. Women continue to earn less than men partly because of the gender pay gap, and partly due to being more likely to be employed in casual or part-time positions while raising children or taking on other caring responsibilities.
While this reality may seem disheartening, there are steps you can take to change the trajectory if you're in the workforce, regardless of whether you work full-time, part-time, or casually.
Planning for the future
Planning your financial future doesn't mean sacrificing all present enjoyment. When you're young, you can set yourself on a path towards greater financial security by taking a few simple steps. The power of compounding interest, where interest is earned on your interest, means that the earlier you act, the more significant the impact.
To start, set achievable goals for yourself and determine how you can reach them. This might involve saving a portion of your income for a home deposit, committing to paying off your mortgage faster or making additional contributions to your super with spare change or small sums of money.
Boost your super
Understanding your current superannuation balance, its investment structure, and the option of making supplementary contributions when you could have a big influence on your lifestyle during your later years.
The journey of building your superannuation nest egg can begin at any stage of life. Your employer may already be contributing to your super account, but it's worth contemplating adding extra funds - even modest contributions now can yield substantial advantages in the future.
Different contribution types offer various features and benefits, and their suitability depends on your personal circumstances and financial commitments.
For more information on making contributions here.
Creating a secure future
Time is one of your greatest assets when it comes to taking control of your finances. By taking proactive steps while you're young, you can continue living your best life not only now but throughout your lifetime.
Remember, it's your money and your future. Financial independence starts with you.
1 The Association of Superannuation Funds of Australia, Superannuation Statistics, May 2023, https://www.superannuation.asn.au/resources/superannuation-statistics
*This information is general advice which does not take into account your personal financial objectives, situation or needs. Before making a decision about Vision Super, you should think about your financial requirements and consider the relevant Product Disclosure Statement and Target Market Determination. Issued by Vision Super Pty Ltd ABN 50 082 924 561 AFSL 225054.