Explaining super to a 90s kid

Let’s face it, superannuation can be a pretty boring subject – especially if you’re in your 20s and more concerned about what you’re wearing to the next Daft Punk concert than you are about retirement.

But the fact of the matter is that your 20s are actually the perfect time to start thinking about your future and how you’re going to fund your retirement. The earlier you start building your super fund, the better off you’ll be further down the road.

So, to help you understand superannuation, we’ve designed this basic guide to retirement planning, specifically for 90s kids.

Hopefully, after reading this, you’ll understand exactly why it’s so important to start preparing for your golden years today.

Why do I need a super fund?

As a child of the 1990s, you probably remember saving up your allowance for the latest Game Boy or Playstation games.

At the time, it was always the early-starters who got their mitts on the latest gadget first. The kids who started putting their allowance away early would always be the first to play the new Pokemon or Crash Bandicoot game.

Now that you’re an adult, you can take many of those early childhood savings lessons and put them to even better use. The earlier you start saving for retirement, the more prepared you’ll be when the time comes to leave the workforce.

Starting a super fund early will also ensure that you have plenty saved away to enjoy the retirement you deserve – whether that be one spent travelling the world, or inside playing the new Playstation 8 console.

How does a super fund work? 

Your employer is required by law to pay a certain percentage of your salary into your super fund each pay cycle. The Superannuation Guarantee Contribution rate currently stands at 9.5 per cent for the 2014/15 year and will eventually rise to 12% by 2022.

This means that your super fund will naturally build up over time, just like the Lego towers you used to make back in the 90s. However, there a few ways to top up your super fund even further to ensure you have plenty tucked away for retirement.

You might choose to make voluntary contributions to your superannuation account, or, if you’re in love – like Monica and Chandler from Friends – you can help build your spouse’s retirement savings by topping up their superannuation from time to time.

Why should I rollover my super?

If you have multiple superannuation accounts under your name – perhaps because you’ve had more than one job, like actress, recording artist and businesswoman Beyoncé – then you might want to consider rolling over your super.

Rolling over your super fund basically involves consolidating all those various funds into one single account, to ensure you’re not paying multiple fees or missing out on valuable interest.

Think of it like Goku from Dragonball Z consolidating all the energy from the people of the world into one all-powerful spirit bomb, in order to vanquish his enemies.

So there you have it, the basics of superannuation explained in a way only 1990s kids would understand.