How to help your kids maximise their superannuation

Why should young people consider a high-growth super strategy?

A high-growth superannuation strategy focuses on investments with higher potential returns, such as shares and property, rather than conservative options like cash or fixed interest. While these higher-growth investments carry more risk, they tend to outperform over the long term.

The benefits of starting early include:

• Compound growth: The earlier they invest, the more time their money has to grow.
• Potentially higher returns: A long investment timeline can help ride out market fluctuations.
• Lower impact of fees over time: Starting early reduces the impact of fees on overall savings.

Are your children taking advantage of the government’s super co-contribution?

If your child is working part-time or earning a low salary, they may be eligible for the government’s super co-contribution scheme, which provides:

• A 50% match on personal after-tax contributions, up to $500 per year if they contribute $1,000.
• Tax-free growth within their super fund, helping their balance grow faster over time.
• Eligibility criteria: They must earn below the income threshold (which may change annually).

Encouraging them to take advantage of this government scheme can significantly boost their super balance over the years.

Visit the ATO website for further information regarding government co-contributions.

Can your children use their super to buy their first home?

Thanks to the First Home Super Saver Scheme (FHSSS), Australians can make voluntary contributions to their super and later withdraw up to:

• $50,000 in contributions, plus any earnings on those contributions.
• Use these savings toward a first home deposit, providing a tax-effective way to save.

This is a fantastic opportunity for young people to get into the property market while maximising their savings potential.

How can parents help their children stay on track?

Helping your children develop smart financial habits early can be one of the biggest gifts you give them. Here’s what you can do:

• Educate them about the importance of super and compound growth.
• Encourage them to make regular voluntary contributions, even small amounts.
• Check eligibility for government incentives and employer contributions.
• Review their super fund choices to ensure they align with long-term goals.
• Encourage them to seek professional help – legalsuper offer free 1:1 consultations which can help them to make decisions that align to their needs.