Virtually all wage and salary earners in Australia receive compulsory superannuation contributions every year, equivalent to 8% of their salary.
These 8% can add up to a lot of money in retirement, especially if it is invested appropriately and you keep a close eye on fees.
If your salary is $60,000, the amount going into your super fund each year is about $4,080 (after adjusting for the 15% contributions tax).
Assume that $60,000 is your average salary over a 40-year career, then total compulsory super contributions would amount to more than $160,000.
If the money is invested astutely and you achieve an average annual return of 8%, this would grow (after adjusting for taxes and ignoring inflation) to $826,000 by the time of your retirement. That’s a handy nest egg and certainly worth keeping a close eye on.
If the money was invested more conservatively and the average annual return was just 6%, then your retirement nest egg would be $530,000. A lot less, but still a handy amount for retirement.
