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Teenagers Super Account

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Hi guys, 

Thought someone might know off the top of their heads or have worked in the industry.  16yo has a super account for her part time job.  Statement arrives and of $181 contributions, $107 have been eaten up in fees and insurance.  Is the insurance likely to be compulsory (as that is most of the deductions), and surely there should be some exemption for earning under a threshold.  Any ideas or tips appreciated.  Figured here was a better place to start than on hold for 2 hours to her super fund being told they can't tell us anything as we aren't her.

TIA

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Same happened with my daughter. I think the default option on opening an industry fund is to opt in to life insurance. She can contact them and reverse it so they cancel the insurance and they refunded the insurance premium

Edited by Parkside
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2 minutes ago, BC_J400 said:

I thought anything under $250 they weren't allowed to touch with fees???

Could be true now, this was before the Royal Commission

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48 minutes ago, BC_J400 said:

I thought anything under $250 they weren't allowed to touch with fees???

I think that's only inactive accounts, so that they can't erode to nothing like they used to.

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Definitely give them a call. The whole industry is jittery right now about anything which might look slightly dodgy, so I'd be surprised if they didn't fix it up straight away for her 

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Get them in the habit of checking their super fund like a bank account - learn what goes in and why, learn what goes out and where to.  This is only the first step from them, sooner or later there will be a great chance they will work for an employer that fails to pay the super - then they miss out.  Far too many adults have no idea on how it works, or how much they have, yet will be relying on it to stave away the cat food diets before going into a nursing home that will see them get turned in their bed once a week.

1. Insurances are the biggest killer, fees are next - shop around on both.  Insurance is probably not required for a 16 year old, once some liabilities such as loans etc start to come on board, or full time work commences - reassess.  Salary continuance is handy if accidents happen so don't discount it, life insurance can possibly wait a bit longer.  For low salaries and young age, the premiums should be low to reflect the risk though

2. Very few industries have compulsory super funds, shop around and have their employer change contributions to their choice of fund.  Teenagers will change jobs - keep it all in the one fund to reduce fees, but shop around every couple of years to ensure the super fund is still the best for fees and insurances (if taken).  Shop around, industry funds are not the lowest fees available in all cases, despite their ads.  Retail funds attached to the major banks are pretty notorious for a reason though.

3. Check the super is being paid - all ordinary time earnings over $450 a calendar month should be attracting super.  Super is not paid on overtime, just about everything else it is.  Super should be paid regularly, however every quarter is mandatory.  If you go longer than 3 months without super being paid, ask the employer.  If the answer is not satisfactory, got straight to the ATO

4. Check the investment strategy once the balance gets to say $2,00; for a teenager for example the returns on cash are not a great strategy (low risk, low return).  The current interest rates on cash are not going to get much more than required to cover the fees

5. All good super funds should have a good online presence with a log in for them to track this, and make changes.  

For a good handle on this, get the Barefoot Investor out from your local library.  He has some good ideas on this and explains it much better than any of us on here will.  He wrote a version aimed at teenagers and pre-teens earlier this year

Edited by Cottoneyes
left an important word out

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What fund is her super with?

fees and insurance seem rather excessive 

My son works casual with me when he is on holidays from uni and I set him up a super account with Australian Super

Returns are good, fees are low and they won’t even cover him for insurance till I think he’s 21

Why would a 16 y/o need insurance of any kind from their super fund anyway?

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Thanks guys. Only just remembered my password to log in on my phone (after two years).  Had to fire up the old PC to post in that time as it remembered me 😕

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