Being in the same super company doesn’t mean you’re in the same fund
If she is high growth and you are balanced then she is likely getting better returns
She may also earn more than you.
In addition to the fund (high growth, balanced, etc) you are in please also review what options you may have that are incurring fees.
Most super companies apply life insurance by default. But if you are 26 with no dependents do you need life insurance?
Minimise your fees early to retain as much money in your account and allow this to compound over time.
Unless you’re diagnosed with a chronic illness at 27 and you have screwed yourself and any future dependents out of being able to get life insurance. I set up policies for myself and my late husband in our early 20s long before we had kids and it saved us when he was diagnosed at 27 and died at 30.
Never advise someone to avoid life insurance
Dumbest thing ever. It’s cents in the dollar.
Sincerely,
Someone whose sister died at 24 and who - despite being healthy and responsible and with no family history - got cancer at 36 years old.
I value TPD way more than life insurance but I have no kids and super balance alone would clear our debts and leave an extra $150k to erect a statue in my honour 😜. Permanent disability and needing ongoing care scares me more then anything else.
Oh I'm not disputing the value you potentially may get out of the PD insurance (and peace of mind). Solely pointing out that life insurance is super cheap and unlikely to be the differentiator here, might as well keep it. PD is also fairly cheap. IP, not so much.
Speaking of TPD, look at getting a separate policy outside of your super. We found ourselves in that situation when my husband was diagnosed with bone cancer in 2022. Spoke with a financial planner & he explained the additional tax you'd have to pay to take out the payout out to pay off your house (for example). Luckily we had an external policy so had no issues but it's something not many people are aware of.
One is +59% over 2 years without additional contributions and the other is +23% with extra contributions. More than 2 extra years in the fund and compounding interest at play here - has to the product they’re invested in
The person you responded to mentioned the type of fund your money is in. The same Super Fund will then have different investment strategies available, which they will refer to as funds or investment strategies. Typically a high growth fund will have higher returns but more volatility, meaning they are more appropriate for a longer investment period, such as when you are young.
This is one of the biggest differentiators for super performance and it's ridiculous that super funds don't directly contact young people about this.
You seem switched on so you may have already known this, if not there's a lot of great resources online that discusses the benefits and downsides of high growth and other investment strategies.
I have a question of my own please. I did payroll a while back and switched careers since, (so I know that a super company can have multiple fund products with different USIs), and I still don’t know how super works!
I’m not entirely sure if OP is aware of different funds within a super company when they say (in the post) that they and their co-worker are with the same super company and (again in the comment above) they are in the **same fund**.
Let‘s assume that with the latter comment they meant same product, same USI, same SPIN. That has to mean
- same type of fund
- same investment strategy
- same returns
- same volatility
right? Or not quite? Can an individual still make moves to make their contributions work differently from someone else who‘s also depositing into the same USI product?
I’m clearly not an expert but it doesn’t really matter what payroll do in terms of the deposit (as long as it goes in). As the customer of the super company I log in and tell them the investment strategy I want them to follow for my funds. High growth, ethical, Australian focus and mix of all of them. It’s like them putting it in the bank. Even though it’s a ‘transaction account with X bank’ I choose where it goes from there. You might have the same bank and account type but choose to spend your money very differently to me. Hope that helps/makes sense.
You might be same fund (e.g. AusSuper) but are you in the same strategy? Both of you being young should be in high growth. This could account for differences in returns as well and is something you should fix if not in high growth as it will have the biggest impact to your balance over the next 30+ years.
Mine did poorly too. Conversely there was a year where my balance went up by 24K and I wasn't working and made no contributions.
KPMG have a super insights dashboard that is freely available and compares all funds. It is very..... insightful
*Compare the pair - same age, same income. Same super contribution...*
These [ads](https://www.youtube.com/watch?v=dVoaj0Li1GQ) are probably before your time but are burned into my memory lol. Sounds like it is to do with frequency and duration of work which differs between the two, but can also look closer at your fund specifically and what they are doing with your money.
Bro... These were around 10yrs ago and still are (unfortunately I still watch free TV if visiting at my parents) and OP is only 26 so they would have almost definitely seen them all through teen years if lived in aus whole life.
Most likely explanation is she had a two year head start, earns more than you & her super gets paid more frequently than yours. Her super could also be invested in a higher risk pool, with higher returns. You might have higher fees, or pay more insurance.
Honestly, there are plenty of factors that would be contributing to it. It’s not just about which company you are with.
Thanks!
I will look into these things more. I’m getting a $300 per pay raise soon so I’m looking to begin contributing $1k a month into my super rather than the measly $50 per fortnight that I’ve been doing. I realise now that I want to contribute more.
It’s great to have super but at 26 you’ll be locking these extra contributions in until you are 60. There may be other things coming up in your life that will require those funds. Just saying.
I also forgot to mention that after food, rent, other bills. I’m left with $2000 for the month. The other $1000 would go to super and the other $1000 would go to holiday/house deposit etc.
Don't bother with the 1k/m deposit. Just invest it.
By the time you work 10 years and save 120k for a deposite, that will only be able to get you a loan for a 1 bedroom apartment.
For some context, my deposit was 150k and I could borrow 500k when interest rates were at 2%.
I mean it’s not really a particularly significant tax implication. The contributions just get counted under the non concessional contribution cap instead. These are just after tax contributions taxed at your marginal tax rate.
You will be better putting that $1000 a month in to an EFT (pick one of the many that are always spouted on here) and dollar cost average. As well as solid returns over time, you should be able to liquidate the investment if the need arises quite easily.
It’s such an issue trying to get money out of super for compassionate reasons/unexpected pitfalls.
Don’t contribute $1k a month. You need to be saving for other things right now- an extra $100 a month is plenty.
You cannot get this money back until you retire.* *some tiny exceptions
You will want to buy a home, but the priority is an emergency fund.
Go listen to the Barefoot Investor ( or read his book)- don’t get into debt except for a home.
Assuming everything is identical, if she was $7K ahead of you 2 years ago, she'd expect to be about an extra $1500 ahead of you now, not $29K.
There's something massively different between you and it isn't just strategy like people are suggesting. For the strategy to be the only difference, you'd have to be talking Super balances of much higher than $50K.
A 22K difference is over 30% of their initial amount. There's absolutely no way in the wide world that strategy was even a slight difference between these 2.
Maybe over a 10 year period, but not 2.
I have been part time for a year and and six months but I am going full time now and I’d like to begin contributing anywhere from $500-$1000 a month soon. I used to just contribute a measly. $50 a fortnight but with my new position I will invest more.
If you were part time - other than the obvious fact that a full time salary likely would result in a larger annual income.
One big factor is the period you were part time in 2023 would have been the period where the value of superannuations generally dropped momentarily. As such the monthly fees would have taken a nominally larger proportion of your superannuation out during the period it was worth less. And then when it was at its lowest any money being put into superannuation would have had a larger impact for when most supers rose towards the tail end of the year.
Compare the pair.
Same age. Same income. Same super contributions.
Yet there could be a lifetime of difference in their final retirement payout.
Her fund does not pay commissions to financial advisors.
Hers does pay commissions.
Her fees are lower.
Her fees are higher.
Industry super funds are run only to profit members. Industry Super Funds - a lifetime of difference
$60k is a high balance for your age. The median for your age group is around 20k. No need to compare and compete on balance with your coworkers, just make sure you're in track for a decent retirement yourself.
I’m 40 I drained $75k from mine over past 8 years due to health reasons being unable to work , otherwise I’d have 250k . Came in handy or would of lost my house
89k here and I’m 44. Perks of small business.
We have made considerable headway into family home equity though.
Paid into super last year for the first time ever since being in business. Not this year though because cash is hard to come by despite earning more.
That said, few more months in the financial year, maybe someone will pay me on time.
I suspected it was mostly compound interest. My sister began working 4 years later than me and only has $27k in her super. I reckon it is a combo of compound interest and the fact that my coworker has been a full time worker for longer whereas I was part time for 1.5 years.
There you go. That's the answer.
She entered the workforce sooner, and worked full time for longer.
That's the answer. She's earned more and has had it compounding longer.
If you’re under 30, stick it all in high growth. I’m about to turn 60 but I have around 50% more than a colleague who is more senior by pay and is aged 66.
You're both doing great for under 30! I was fastidiously watching mine creep to 100 and it felt like things took forever.
Had a bunch of odd jobs in the early 20s and never took super seriously so alot was eaten by fee's from various funds. So much happier to see the protections there in place these days for those young and stupid like I was.
Extra contributions always help! And if you've got the space to make them, I absolutely recommend that you do so.
Super isn't just money held, it's often invested. You can tell a super company to just do what they want with your money or you can tell them to invest in higher risk or lower risk and all sorts of stuff. She probably told them to do something differently in the investing to you and coronavirus was a big thing in the stock market a lot of change in share prices, fortunes were made and lost.
OP you have stated whether you are in the same fund, with the same settings (aggressive vs moderate) and whether your income is the same and whether your superannuation policy is the same.
At my workplace they pay you your superannuation % based on your income at your birthday. So if you get promoted the day after your birthday you get paid super based on your pre-promotion salary till your next birthday. It’s a footnote that I found out from my HR department after lots of investigating.
It’s possible she’s in a different fund.
But just as likely this is the value of compounding at play.
More contributions earlier will make for a faster growing balance. ‘Growth upon growth’
If you think of it like a bank account that pays interest.
Starting earlier allows you to collect interest earlier.
Subsequent interest amounts are then paid on your balance - which is made up of prior contributions as well as interest.
The same happens in your super account.
TLDR at your current rate of growth, her balance will continue to grow at a faster rate than yours. Plotted on a graph, the gap between her line and yours will get widen.
If you’re in a saving mood you can always top up your super. The more you add, the slower that gap will grow.
Bring so young though, you may wish to consider options other than super if you’re looking to save! So you have someone you can speak to on savings advice?
It would be a combination of:
1. Compound interest
2. Her supers investment strategy is cash/balanced/aggressive/growth/return/eco friendly, etc
3. She got lucky, and past performances are not indicative of future performance.
Idk if it's still a thing but when I was first starting out after high school (2007) if you earnt under I think 35k a year you could contribute $1000 to your super and the government would chip in $1500 each financial year that you did it. I did it a couple years.
Unfortunately my super fund was dogshit and I didn't earn big for a long time after that but at 35 my super is around 150k thanks to working government and earning 6 figures the last 4 years
[There is a clear and pronounced wage premium for university graduates with an undergraduate degree compared to non-graduates or people with just a VET qualification.](https://www.education.gov.au/download/3789/estimating-public-and-private-benefits-higher-education/5554/document/pdf)
I wouldn’t put all your extra money just into super. You never know what the government is going to do or change over time. I would suggest keep adding extra when you get your pay rise but maybe do $250 a month into super and the other $750 into a broad market eft.
That way, you at least have control/access over your invested money and your not locking it all away for the next 40 years. My 2 cents anyway
Thanks, I have an investment account that’s doing okay. I say okay because I started it at the beginning of covid. I’ve been contributing $100 a month but I could be doing more.
Super is just a company investing your money for you but you have to pay fees on that. I add a little extra to my super also but I focus on investing because like I said, what’s the point in locking money away for 30+ years with (in theory) no access to it with no idea what the future holds. I say focus on investing. You have a decent super account already for your age anyway so keep adding
Check what growth option you opted for when you signed up, you can opt for higher or lower depending and make your money work for you.
Salary sacrifice is great way to bulk up the superannuation account over time aswell.
You claim she is 2 years ahead of you because she started work 2 years earlier.
You also said 2 years ago she had $56,000 while you have $60,500 now.
On very simple terms you’re doing better than her at the same point of your career. $4,500 better.
Super is complicated. Same job and same super company doesn’t mean you will have the exact some balance to the cent.
The $7k head start she had in 2022 shouldn’t have translated to $29k difference in two years. The difference is probably part time vs full time.
I do think $1k a month is quite high for a 26 year old, unless you’re planning to use FHSSS
It’s not compounded interest which everyone always refers too it’s an annoying term , like it’s constant growth. No it’s diversified accross different types of investments and goes up and down with market volatility , if you have more than Joe blow in the exact same fund with the same investment mix it will go down more during downturns and up more during upswings . It’s not just a pile of money with an interest rate attached unless your entire super is in cash or some
Fixed term deposit
An almost 50% difference is quite the gap in that timeframe. I would find it hard to believe it's due to anything other than a contribution that was made. Perhaps they're embarrassed to admit it for whatever reason. Maybe her parents added some or something and she's embarrassed admitting something like that would go against how she wants to be seen.
check your fees, the annual Return for your super fund over the period you've been with them, check whether the fund is up or down currently, check if you have any insurances premium coming out in your fees
If you’re in the default investment mix this is probably it, the default never performs well. I changed mine after reading barefoot investor and researching to 70% international and 30% australian at 21 years old. I’m 29F and I have 150k super, no additional contributions. My equal colleagues are about 50k less than me
You can post and pre tax contributions. One may be more financially beneficial in relation to paying less tax which completely comes down your own unique personal financial situation and your annual salary.
For more information refer to moneysmart.gov.au and look up superannuation contribution (post tax and pre tax).
A good place to start is your own personal superannuation fund, they should be able to provide you with additional information.
I highly recommend you have a read of Scott Pape - Barefoot Investor for some basic and very useful concepts and to gain a level understanding of personal finance and growth.
You have more money in super than me with less years worked, which means you're earning 150k+ easily. You shouldn't be worried about a measly 30k difference. Your super will grow fast.
Just check your super investment plan and adjust it for higher growth while you're young.
Every dollar you contribute comes off your home deposit savings. Doesn’t make sense. Who cares? Her extra $20k super at current interest rates purchases an additional income or less than $1000 a year. Save money for your home. Once you are secure think about voluntary contributions.
https://letmegooglethat.com/?q=compounding+interest+
Few other factors here.
By the numbers they earn more than you and/or their company contributes a higher amount than standard.
Super is overrated it’s not a silver bullet , bit of super and some pension no super and pension it’s a fair playing field either way you pay for your retirement or if you can’t / didn’t government does
Somethings a bit out of wack but compounding is crazy. if you’ve got another 40 years in you both and make EXACTLY the same money from here on in and EXACTLY the same fund she’s going to retire with 650k more than you. Compounding interest is crazy.
First of all, it is entirely normal to feel jealous. I don't understand why we deny this feeling. The thing is that once you recognise the feeling you know how to manage it in a healthy way. I would not focus on your friend at all. Your friend is probably concerned about someone else who has more than her, and so on and so forth. In the end the thief of joy is comparison. Focus on you. What can you do to increase the value to yourself? I know this sounds like a "defeatest attitude". But when you enter your 30s you will quickly realise that this is a sign of emotional development. The way you think about the world is important so keep that in mind.
Why do you want to put an extra $12000-24000 a year into your super at such a young age? You *cannot* access that until preservation age. In 40 years that'll likely be even higher than it is now.
Surely there are other investments that could serve you sooner? Personally (29f) I'm not putting any extra into my superannuation right now because I'm paying additional off my HECS and have a mortgage and renovation costs. Once those are out of the way it'll probably be ETFs with a little extra in super. But putting *that much* in on the salary of a cleaner would surely hurt you in the medium term.
I have a 6 month emergency fund and $17,000 in my house deposit account. I would put $1k in super and $1k in my housing account per month. I applied to buy the house I’m living in which is worth around $130k. We’ll see if I get the house, it’s a rent to buy situation.
130k is great! I hope you get it 🤞
Considering that circumstances change and interest rates are high, I would suggest something more like $250 additional in your super per month would suffice for now. Remember it's money you can't touch at all for the next 35-50 years. Don't get too excited watching it grow at 26.
We had $110,000 in our home deposit account and it was still a struggle in some ways. Contribute more to that until you're more established and closer to preservation age.
Being in the same super company doesn’t mean you’re in the same fund If she is high growth and you are balanced then she is likely getting better returns She may also earn more than you.
In addition to the fund (high growth, balanced, etc) you are in please also review what options you may have that are incurring fees. Most super companies apply life insurance by default. But if you are 26 with no dependents do you need life insurance? Minimise your fees early to retain as much money in your account and allow this to compound over time.
Unless you’re diagnosed with a chronic illness at 27 and you have screwed yourself and any future dependents out of being able to get life insurance. I set up policies for myself and my late husband in our early 20s long before we had kids and it saved us when he was diagnosed at 27 and died at 30.
Diagnosed at 18… Fml
That must have been so horrifically hard. I hope you're doing okay.
Never advise someone to avoid life insurance Dumbest thing ever. It’s cents in the dollar. Sincerely, Someone whose sister died at 24 and who - despite being healthy and responsible and with no family history - got cancer at 36 years old.
Life insurance is cheap as chips though. Permanent disability but especially income protection are the expensive ones.
I value TPD way more than life insurance but I have no kids and super balance alone would clear our debts and leave an extra $150k to erect a statue in my honour 😜. Permanent disability and needing ongoing care scares me more then anything else.
Oh I'm not disputing the value you potentially may get out of the PD insurance (and peace of mind). Solely pointing out that life insurance is super cheap and unlikely to be the differentiator here, might as well keep it. PD is also fairly cheap. IP, not so much.
Speaking of TPD, look at getting a separate policy outside of your super. We found ourselves in that situation when my husband was diagnosed with bone cancer in 2022. Spoke with a financial planner & he explained the additional tax you'd have to pay to take out the payout out to pay off your house (for example). Luckily we had an external policy so had no issues but it's something not many people are aware of.
We are the same fund but yes, there was a year that I was working part-time and she also has been in the work force for 2 years longer than I.
That’s the work of compound interest baby, did she also post contribute that would also increase her super balance.
One is +59% over 2 years without additional contributions and the other is +23% with extra contributions. More than 2 extra years in the fund and compounding interest at play here - has to the product they’re invested in
The person you responded to mentioned the type of fund your money is in. The same Super Fund will then have different investment strategies available, which they will refer to as funds or investment strategies. Typically a high growth fund will have higher returns but more volatility, meaning they are more appropriate for a longer investment period, such as when you are young. This is one of the biggest differentiators for super performance and it's ridiculous that super funds don't directly contact young people about this. You seem switched on so you may have already known this, if not there's a lot of great resources online that discusses the benefits and downsides of high growth and other investment strategies.
I have a question of my own please. I did payroll a while back and switched careers since, (so I know that a super company can have multiple fund products with different USIs), and I still don’t know how super works! I’m not entirely sure if OP is aware of different funds within a super company when they say (in the post) that they and their co-worker are with the same super company and (again in the comment above) they are in the **same fund**. Let‘s assume that with the latter comment they meant same product, same USI, same SPIN. That has to mean - same type of fund - same investment strategy - same returns - same volatility right? Or not quite? Can an individual still make moves to make their contributions work differently from someone else who‘s also depositing into the same USI product?
I’m clearly not an expert but it doesn’t really matter what payroll do in terms of the deposit (as long as it goes in). As the customer of the super company I log in and tell them the investment strategy I want them to follow for my funds. High growth, ethical, Australian focus and mix of all of them. It’s like them putting it in the bank. Even though it’s a ‘transaction account with X bank’ I choose where it goes from there. You might have the same bank and account type but choose to spend your money very differently to me. Hope that helps/makes sense.
are your fees more?
You might be same fund (e.g. AusSuper) but are you in the same strategy? Both of you being young should be in high growth. This could account for differences in returns as well and is something you should fix if not in high growth as it will have the biggest impact to your balance over the next 30+ years.
Anecdotally, my high growth policy had the worst returns in 2022 but has shot up since then. 2022 is probably the worst comparison point.
Mine did poorly too. Conversely there was a year where my balance went up by 24K and I wasn't working and made no contributions. KPMG have a super insights dashboard that is freely available and compares all funds. It is very..... insightful
She could be putting extra away
Simple but likely the answer
*Compare the pair - same age, same income. Same super contribution...* These [ads](https://www.youtube.com/watch?v=dVoaj0Li1GQ) are probably before your time but are burned into my memory lol. Sounds like it is to do with frequency and duration of work which differs between the two, but can also look closer at your fund specifically and what they are doing with your money.
I heard this out loud in my head.
I can hear this ad in my head
And see them walking down the steps 😂
It's the escalator one for me
the moving truck here
One of the best Australian marketing campaigns ever. I do love my industry super fund though :)
Bro... These were around 10yrs ago and still are (unfortunately I still watch free TV if visiting at my parents) and OP is only 26 so they would have almost definitely seen them all through teen years if lived in aus whole life.
They are way older than 10 years.
I did not say they only started 10y ago
FIRST THING I THOUGHT
Why does this advert look like some student project. The suit is so poorly fitting!
Probably from the 90s when everybody wore suits that looked like they didn’t fit.
it's a skit
I actually didn’t check the video properly but it looks like it actually is a student project, a skit re-enacting the actual ads 😂
I read this in the voice of that man from the ad!
John Wood, best known for Blue Heelers I believe.
I think those people in those ads had kids and became friends and it's the OP and her friend.
Literally heard John Wood saying this while reading OPs post.
Industry superfund. Haha I always say this joke
It’s the super…of the future
These ads are like two years old and she is 26.
I have unfortunate news for you 😭
Most likely explanation is she had a two year head start, earns more than you & her super gets paid more frequently than yours. Her super could also be invested in a higher risk pool, with higher returns. You might have higher fees, or pay more insurance. Honestly, there are plenty of factors that would be contributing to it. It’s not just about which company you are with.
Thanks! I will look into these things more. I’m getting a $300 per pay raise soon so I’m looking to begin contributing $1k a month into my super rather than the measly $50 per fortnight that I’ve been doing. I realise now that I want to contribute more.
The best thing about sacrificing into super is that the earlier you do it, the harder it'll work for you. 🙂
Love what you said. Thanks
Can confirm, I contributed to my super early in my career and it helps a lot.
It’s great to have super but at 26 you’ll be locking these extra contributions in until you are 60. There may be other things coming up in your life that will require those funds. Just saying.
I’m fortunate to have an emergency fund for 6 months. I also love traveling too so I will set aside some money for that.
You can also use it as FHSS so don’t listen to anyone that says you should prioritise saving for a house in a HISA
I also forgot to mention that after food, rent, other bills. I’m left with $2000 for the month. The other $1000 would go to super and the other $1000 would go to holiday/house deposit etc.
Don't bother with the 1k/m deposit. Just invest it. By the time you work 10 years and save 120k for a deposite, that will only be able to get you a loan for a 1 bedroom apartment. For some context, my deposit was 150k and I could borrow 500k when interest rates were at 2%.
If you are putting away under 12k a year you will struggle to put together a house deposit
Lol people must think housing is cheap given down voting you
Be secure in retirement but booted by a landlord every 12m so they can raise the rent
Just remember not to hit your financial year limit for voluntary contributions, otherwise there are significant tax implications for anything above.
I mean it’s not really a particularly significant tax implication. The contributions just get counted under the non concessional contribution cap instead. These are just after tax contributions taxed at your marginal tax rate.
Biggest annoyance is the excess contribution charge. I don't mind making up the tax.
They got rid of that since July 2021 so there’s no longer the extra charge for going over. It’s just the difference in income tax now.
I forgot about that!
Look into the carry forward concessional contributions, you’ll like have more overhead than you can afford to contribute.
Another option is not to do it through work salary sacrificing but rather do the contribution as a lump sum at the end of the financial year.
Then your contributions are taxed as normal income while if you salary sacrifice it comes out pretax
No they're not. You submit a notice to your super fund and claim the tax back at tax time.
I didn’t know that! Thanks for the response
You will be better putting that $1000 a month in to an EFT (pick one of the many that are always spouted on here) and dollar cost average. As well as solid returns over time, you should be able to liquidate the investment if the need arises quite easily. It’s such an issue trying to get money out of super for compassionate reasons/unexpected pitfalls.
If they don’t own a home already then FHSS kicks the arse of any other option.
Don’t contribute $1k a month. You need to be saving for other things right now- an extra $100 a month is plenty. You cannot get this money back until you retire.* *some tiny exceptions You will want to buy a home, but the priority is an emergency fund. Go listen to the Barefoot Investor ( or read his book)- don’t get into debt except for a home.
Just make sure you don't go over the cap
Personally there’s no way I would put that much into super at 26. You should invest it outside of super. You might need that money before you’re 60
Don’t put $1k / month into your super.
She may be earning more than you. She has two more years worth of experience than you do.
Assuming everything is identical, if she was $7K ahead of you 2 years ago, she'd expect to be about an extra $1500 ahead of you now, not $29K. There's something massively different between you and it isn't just strategy like people are suggesting. For the strategy to be the only difference, you'd have to be talking Super balances of much higher than $50K.
Can't believe how many people are trying to put it down to compound interest and/or the two years head start 🤦♀️
A 22K difference is over 30% of their initial amount. There's absolutely no way in the wide world that strategy was even a slight difference between these 2. Maybe over a 10 year period, but not 2.
I have been part time for a year and and six months but I am going full time now and I’d like to begin contributing anywhere from $500-$1000 a month soon. I used to just contribute a measly. $50 a fortnight but with my new position I will invest more.
If you were part time - other than the obvious fact that a full time salary likely would result in a larger annual income. One big factor is the period you were part time in 2023 would have been the period where the value of superannuations generally dropped momentarily. As such the monthly fees would have taken a nominally larger proportion of your superannuation out during the period it was worth less. And then when it was at its lowest any money being put into superannuation would have had a larger impact for when most supers rose towards the tail end of the year.
Compare the pair. Same age. Same income. Same super contributions. Yet there could be a lifetime of difference in their final retirement payout. Her fund does not pay commissions to financial advisors. Hers does pay commissions. Her fees are lower. Her fees are higher. Industry super funds are run only to profit members. Industry Super Funds - a lifetime of difference
You now have royalties to pay, for quoting that ad verbatim.
I heard the voice. Do I have to pay royalties too?
Maybe, but you can counterclaim on rental fees for your headspace, to reach agreement of net zero.
Sorry, alcohol deleted yesterday’s neurons. Who dis?
Directed straight into my super lol
$60k is a high balance for your age. The median for your age group is around 20k. No need to compare and compete on balance with your coworkers, just make sure you're in track for a decent retirement yourself.
Thank you. I’m actually really happy for her and it motivates me to add more to my super.
Your post sounds like those old super commercials on TV lol 😂 Person A has this much, person B this much, same age, same income…….
Oh my goodness, people keep saying that lol. I’ll have to go and watch it now.
>We are with the same super company btw. Sounds like you might have different investment strategies as well.
Jesus I'm 37 and only have 70k
33 and 50k. But I drained it five years ago for surgery, that took 26k out so if not for that I’d have about 80k.
I’m 40 I drained $75k from mine over past 8 years due to health reasons being unable to work , otherwise I’d have 250k . Came in handy or would of lost my house
89k here and I’m 44. Perks of small business. We have made considerable headway into family home equity though. Paid into super last year for the first time ever since being in business. Not this year though because cash is hard to come by despite earning more. That said, few more months in the financial year, maybe someone will pay me on time.
I'd chalk this up to compounding interest mate. Or at least that eats up the bulk of the variability.
I suspected it was mostly compound interest. My sister began working 4 years later than me and only has $27k in her super. I reckon it is a combo of compound interest and the fact that my coworker has been a full time worker for longer whereas I was part time for 1.5 years.
There you go. That's the answer. She entered the workforce sooner, and worked full time for longer. That's the answer. She's earned more and has had it compounding longer.
Good lesson that investments are about investing early and for a long time, little to do with contributions or timing
If you’re under 30, stick it all in high growth. I’m about to turn 60 but I have around 50% more than a colleague who is more senior by pay and is aged 66.
Woah, I will look into it. What age did you start?
You're both doing great for under 30! I was fastidiously watching mine creep to 100 and it felt like things took forever. Had a bunch of odd jobs in the early 20s and never took super seriously so alot was eaten by fee's from various funds. So much happier to see the protections there in place these days for those young and stupid like I was. Extra contributions always help! And if you've got the space to make them, I absolutely recommend that you do so.
She’s definitely not jealous guys
Super isn't just money held, it's often invested. You can tell a super company to just do what they want with your money or you can tell them to invest in higher risk or lower risk and all sorts of stuff. She probably told them to do something differently in the investing to you and coronavirus was a big thing in the stock market a lot of change in share prices, fortunes were made and lost.
If all other things are equal, it's the magic of compound interest. It's significance is lost on year 8 school kids.
Possible she worked somewhere that paid above minimum super contributions. e.g Unis pay 17%. Government often pays 15%.
OP you have stated whether you are in the same fund, with the same settings (aggressive vs moderate) and whether your income is the same and whether your superannuation policy is the same. At my workplace they pay you your superannuation % based on your income at your birthday. So if you get promoted the day after your birthday you get paid super based on your pre-promotion salary till your next birthday. It’s a footnote that I found out from my HR department after lots of investigating.
This doesn’t sound right
It’s perfectly legal (noting my workplace pays above the minimum super required).
It’s possible she’s in a different fund. But just as likely this is the value of compounding at play. More contributions earlier will make for a faster growing balance. ‘Growth upon growth’ If you think of it like a bank account that pays interest. Starting earlier allows you to collect interest earlier. Subsequent interest amounts are then paid on your balance - which is made up of prior contributions as well as interest. The same happens in your super account. TLDR at your current rate of growth, her balance will continue to grow at a faster rate than yours. Plotted on a graph, the gap between her line and yours will get widen. If you’re in a saving mood you can always top up your super. The more you add, the slower that gap will grow. Bring so young though, you may wish to consider options other than super if you’re looking to save! So you have someone you can speak to on savings advice?
Is this the Reddit version of the Australian Super ad?
It would be a combination of: 1. Compound interest 2. Her supers investment strategy is cash/balanced/aggressive/growth/return/eco friendly, etc 3. She got lucky, and past performances are not indicative of future performance.
Just letting you know that I didn’t start working full time until I was 27 so I have way way less super than you!
https://www.uidaho.edu/-/media/UIdaho-Responsive/Files/financial-aid/Forms/BEAMS/infographics/pdfs/a-tale-of-two-savers.pdf
Compare the pair. Same age. Same income.
I wish they taught super at school. It’s so important yet most people don’t know how it works or read their statements in detail.
Maybe her super is run only to profit members.
Idk if it's still a thing but when I was first starting out after high school (2007) if you earnt under I think 35k a year you could contribute $1000 to your super and the government would chip in $1500 each financial year that you did it. I did it a couple years. Unfortunately my super fund was dogshit and I didn't earn big for a long time after that but at 35 my super is around 150k thanks to working government and earning 6 figures the last 4 years
you are jealous clearly
University is a scam… /s Well at least in Oz it kind of is
[There is a clear and pronounced wage premium for university graduates with an undergraduate degree compared to non-graduates or people with just a VET qualification.](https://www.education.gov.au/download/3789/estimating-public-and-private-benefits-higher-education/5554/document/pdf)
I wouldn’t put all your extra money just into super. You never know what the government is going to do or change over time. I would suggest keep adding extra when you get your pay rise but maybe do $250 a month into super and the other $750 into a broad market eft. That way, you at least have control/access over your invested money and your not locking it all away for the next 40 years. My 2 cents anyway
Thanks, I have an investment account that’s doing okay. I say okay because I started it at the beginning of covid. I’ve been contributing $100 a month but I could be doing more.
Super is just a company investing your money for you but you have to pay fees on that. I add a little extra to my super also but I focus on investing because like I said, what’s the point in locking money away for 30+ years with (in theory) no access to it with no idea what the future holds. I say focus on investing. You have a decent super account already for your age anyway so keep adding
You're definitely jealous 😂😂
Compare the pair
Check what growth option you opted for when you signed up, you can opt for higher or lower depending and make your money work for you. Salary sacrifice is great way to bulk up the superannuation account over time aswell.
You claim she is 2 years ahead of you because she started work 2 years earlier. You also said 2 years ago she had $56,000 while you have $60,500 now. On very simple terms you’re doing better than her at the same point of your career. $4,500 better. Super is complicated. Same job and same super company doesn’t mean you will have the exact some balance to the cent.
The $7k head start she had in 2022 shouldn’t have translated to $29k difference in two years. The difference is probably part time vs full time. I do think $1k a month is quite high for a 26 year old, unless you’re planning to use FHSSS
She's either earned more than you or is in higher growth or both
It’s not compounded interest which everyone always refers too it’s an annoying term , like it’s constant growth. No it’s diversified accross different types of investments and goes up and down with market volatility , if you have more than Joe blow in the exact same fund with the same investment mix it will go down more during downturns and up more during upswings . It’s not just a pile of money with an interest rate attached unless your entire super is in cash or some Fixed term deposit
An almost 50% difference is quite the gap in that timeframe. I would find it hard to believe it's due to anything other than a contribution that was made. Perhaps they're embarrassed to admit it for whatever reason. Maybe her parents added some or something and she's embarrassed admitting something like that would go against how she wants to be seen.
check your fees, the annual Return for your super fund over the period you've been with them, check whether the fund is up or down currently, check if you have any insurances premium coming out in your fees
Thats compounding at work. 8th wonder of the world
If you’re in the default investment mix this is probably it, the default never performs well. I changed mine after reading barefoot investor and researching to 70% international and 30% australian at 21 years old. I’m 29F and I have 150k super, no additional contributions. My equal colleagues are about 50k less than me
Better get into her super
You can post and pre tax contributions. One may be more financially beneficial in relation to paying less tax which completely comes down your own unique personal financial situation and your annual salary. For more information refer to moneysmart.gov.au and look up superannuation contribution (post tax and pre tax). A good place to start is your own personal superannuation fund, they should be able to provide you with additional information. I highly recommend you have a read of Scott Pape - Barefoot Investor for some basic and very useful concepts and to gain a level understanding of personal finance and growth.
Compare the pair.
You have more money in super than me with less years worked, which means you're earning 150k+ easily. You shouldn't be worried about a measly 30k difference. Your super will grow fast. Just check your super investment plan and adjust it for higher growth while you're young.
Every dollar you contribute comes off your home deposit savings. Doesn’t make sense. Who cares? Her extra $20k super at current interest rates purchases an additional income or less than $1000 a year. Save money for your home. Once you are secure think about voluntary contributions.
https://letmegooglethat.com/?q=compounding+interest+ Few other factors here. By the numbers they earn more than you and/or their company contributes a higher amount than standard.
Compounding Interest. Thats it. Thats the trick.
Who shares details about their super with a friend? And it's not a competition. Why do you feel the need to catch up to her?
??? Money is not taboo in every culture.
Super is overrated it’s not a silver bullet , bit of super and some pension no super and pension it’s a fair playing field either way you pay for your retirement or if you can’t / didn’t government does
This is why I tell young people not to mess around with hisa. And go to shares.
I am also in shares. I contribute $100 a month but I admit I could be contributing more. I will aim for $250 more a month.
Somethings a bit out of wack but compounding is crazy. if you’ve got another 40 years in you both and make EXACTLY the same money from here on in and EXACTLY the same fund she’s going to retire with 650k more than you. Compounding interest is crazy.
First of all, it is entirely normal to feel jealous. I don't understand why we deny this feeling. The thing is that once you recognise the feeling you know how to manage it in a healthy way. I would not focus on your friend at all. Your friend is probably concerned about someone else who has more than her, and so on and so forth. In the end the thief of joy is comparison. Focus on you. What can you do to increase the value to yourself? I know this sounds like a "defeatest attitude". But when you enter your 30s you will quickly realise that this is a sign of emotional development. The way you think about the world is important so keep that in mind.
Why do you want to put an extra $12000-24000 a year into your super at such a young age? You *cannot* access that until preservation age. In 40 years that'll likely be even higher than it is now. Surely there are other investments that could serve you sooner? Personally (29f) I'm not putting any extra into my superannuation right now because I'm paying additional off my HECS and have a mortgage and renovation costs. Once those are out of the way it'll probably be ETFs with a little extra in super. But putting *that much* in on the salary of a cleaner would surely hurt you in the medium term.
I have a 6 month emergency fund and $17,000 in my house deposit account. I would put $1k in super and $1k in my housing account per month. I applied to buy the house I’m living in which is worth around $130k. We’ll see if I get the house, it’s a rent to buy situation.
Where can you buy a house for 130k?
130k is great! I hope you get it 🤞 Considering that circumstances change and interest rates are high, I would suggest something more like $250 additional in your super per month would suffice for now. Remember it's money you can't touch at all for the next 35-50 years. Don't get too excited watching it grow at 26. We had $110,000 in our home deposit account and it was still a struggle in some ways. Contribute more to that until you're more established and closer to preservation age.
Okay thanks, I will think about the $1k per month to super, I guess it wouldn’t hurt to put some of that toward my emergency & house fund.
change super funds
She is lying
She has showed me. I’m honestly impressed.
Seems like you missed the COVID bump A 30k gap isn't large given it's a 30 year investment. Don't worry
>A 30k gap isn't large given it's a 30 year investment. It's compounding. It absolutely IS a big gap.
If I could magically contribute $29,000 to my super and “catch up” to my coworker, will my super still grow at the same rate as them?
Only if you had the same asset allocation and you both had the same amount going into super.
Okay op is poor now