Why talking to kids about super can be a $100,000 gift
Most parents want to set their children up for success.
Often, the focus is on saving for education, teaching budgeting skills, or encouraging good spending habits. But one of the most powerful lessons you can give your child is about something many young people barely know exists: Superannuation.
In a recent article published in The West Australian, Dawn Thomas, Senior Wealth Adviser at The Wealth Designers shared why early decisions around super can be worth more than $100,000 by the time your child retires.
Why it matters
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The power of time
Compounding means that money invested early grows more significantly than larger amounts invested later in life. A small start in your teens or twenties can outpace decades of later contributions. -
Tax advantages
Super is taxed at 15 per cent, far lower than most income tax rates. This allows investments to grow faster inside the system.
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The importance of choice
By default, most funds put members into a balanced option. For young people with decades ahead of them, growth-focused investments may be more suitable and deliver stronger long-term outcomes.
What parents can do
- Check that super is being paid correctly and that contributions are landing in the right fund.
- Review the default investment option and consider whether a growth mix is more appropriate for a young person.
- Use online tools like MoneySmart’s super calculator to show children the long-term impact of today’s decisions.
The takeaway
Super may not feel exciting to teenagers or young adults, but the earlier they understand it, the more powerful it becomes. As Dawn shared, teaching kids to value their super could be one of the greatest financial gifts parents can give.