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How much do I need?
The Association of Superannuation Funds of Australia (ASFA) recommends having $466,000 for retirement if you are single, or $640,000 if you are a couple. Remember that this money needs to last you 20 years to pay for all your expenses when you finish working.
Your boss pays you 9.5% of your wage into super, which will add up over the long run but you can elect to pay more into your super account to make it grow even quicker. Have a look at the two examples below. They both have the same income and same investment returns. Ed’s boss pays him the minimum amount of super required, while Jack pays an extra $25 per week.
This is Ed
Ed earns $50,000 per year. His boss pays 9.5% ($4,750) of his wage into his super fund every year. The fund earns 7% per year and Ed works for 30 years.
This is Jack
Jack also earns $50,000 per year and his boss pays 9.5% ($4,750) into his super fund. But Jack adds $25 per week to his super fund using his own money. His fund also earns 7% per year and Jack works for 30 years.
How to choose a good super fund
Below are a few different websites that compare super funds. Remember to look at for the four things that we mentioned above when deciding which fund you want to use. While comparison sites can be useful, it is worth knowing that they may make money through link clicks and advertisements on their website.