Superannuation can be confusing, but it doesn’t need to be. The team at HESTA has put together some common super myths – and the facts – to help make your retirement planning clearer. 

Myth: It’s better to spread super across different funds 

Fact: Your super is like a savings account: the more that’s in it, the more it can potentially earn through compounding investment returns, i.e. interest earned on interest. 

When you have multiple accounts, you also pay multiple sets of fees and costs, so it’s important to consider keeping all your super together in one place. You can also spread your risk and diversify your investments within the one fund. 

Before you combine your super into one account, be aware that your benefits with other funds, like insurance cover, may stop if you close that account. 

Myth: I have to change super funds when I change jobs 

Fact: You can take your existing super account with you whenever you start a new job. Your fund is ‘stapled’ to you, which means it will follow you from job to job. If you’re already with a fund you trust, you can let your employer know you’d like to stay with them using the ATO super choice form when you first start.  

If you don’t give your employer a choice of fund form, they must contact the ATO to check if you have an existing fund. If you have one, they must pay your super into that fund. If you don’t have an existing fund and you haven’t given them a choice of fund form, they’ll create a new account for you with their default fund.  

Ultimately, the choice of super fund is up to you.

Myth: I can’t access my super until I’m 67 

Fact: You can access your super when you reach preservation age (60) and meet a condition of release. This means you must either be permanently retired from the workforce, have stopped an employment arrangement or set up a Transition To Retirement (TTR) strategy while you’re still working, after turning 60. You can also access your super once you reach age 65, even if you’re still working.  

Super can sometimes be released early due to financial hardship or on compassionate grounds.

Myth: My employer makes contributions to my super, so I don’t have to 

Fact: Under the super guarantee, your employer contributes a minimum of 12% of your salary to your super. These contributions alone might not be enough to give you the retirement you want, especially as life expectancy increases. You can make your own contributions to super on top of what your employer pays and within the annual contribution limits, if you can afford it.

Myth: I don’t need to think about my super until I’m older

Fact: Retirement might seem like a long way off, but the sooner you start paying attention to your super, the more time there is for your balance to grow. Thanks to the power of compound interest, even small actions now can make a big difference to your retirement.  

Learn more here.

Issued by H.E.S.T. Australia Ltd ABN 66 006 818 695 AFSL No. 235249, the Trustee of HESTA ABN 64 971 749 321.  

This information is of a general nature. It does not take into account your objectives, financial situation or specific needs so you should look at your own financial position and requirements before making a decision. You may wish to consult an adviser when doing this. For more information, free call 1800 813 327 or visit hesta.com.au/pds for a copy of a Product Disclosure Statement which should be considered when making a decision about HESTA products and consider any relevant risks (hesta.com.au/understandingrisk). The target market determination for HESTA products can be found at hesta.com.au/tmd.