How to find a super fund for low-income earners?

There is no one ‘best’ super fund for lower-income earners. Instead, the best super fund is one that suits your financial needs and situation. This is why it’s crucial that you compare your options to ensure that it is the right fit for you.

There are a number of key factors of a super fund worth comparing for lower-income earners, including:

• Low fees

When you earn a low income, finding a fund that charges lower fees may help you maximise the money you’ve saved for your retirement. If the fees are high, it will reduce the balance in your super account, making it difficult to build a sizeable retirement balance. Some of the fees include administration and investment charges. The super fund may also charge a performance fee depending on its annual performance. You may also pay a premium if you have life or total and permanent disability insurance via your super fund.

• Strong performance

Another factor while choosing the best super fund for low-income individuals is its performance. This is basically the returns delivered by the fund during the year and can significantly determine the balance in your super. Even a minor difference between the performances of the funds can impact your retirement balance. 

You could use RateCity’s comparison tables to compare the past performance of various funds. It’s generally a good idea to check a fund’s performance over at least five years to get a fair idea of the returns it has given to members.

Even though strong performance is one of the ways to compare super funds, it’s important to remember that a super fund’s past performance is not a guaranteed indicator of its future returns. It’s also worth comparing other factors, such as the type of fees charged by a super fund, insurance options and other features, before selecting a fund that will meet your present and future needs.

The co-contribution is applicable if your yearly income is less than $53,564. To be eligible for this scheme, you must contribute some amount from your post-tax income to your super fund before June 30 of each year. 

Additional eligibility criteria include:

• At least 10 per cent of your total income must be earned from employment activities, business, or a combination of the two.
• You should not be aged over 71 years at the end of the financial year.
• You must not hold a temporary visa at any time during the financial year unless it was a prescribed visa or you’re a New Zealand citizen.
• File your income tax return for the financial year on time. 

You don’t have to apply for the super co-contribution scheme. When you file your income tax return, the Australian Tax Office (ATO) determines your eligibility. If your super fund has your valid TFN, the ATO directly contributes to your super.

•  Consider making concessional contributions over the mandatory employer contributions
•  Look into the low-income superannuation tax offset
•  Ask your spouse to contribute to your super account if their income is higher than yours
•  Consolidate your accounts to eliminate duplication of fees
•  Check if you have any lost super accounts

Some of the above may have specific tax implications. It is recommended you check with your tax advisor or the ATO to determine the exact consequences.