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At 25 Tamara waved goodbye to study
and part-time work and started her first
full-time job as a primary teacher.
By using VicSuper’s services and taking action, she can significantly increase her income from her super account balance.
Tamara's super balance:
View disclosure and assumptions
Results are shown in today’s dollars, which means they have been adjusted for the effect of inflation over time. We have assumed a default rate of inflation of 3.5% over the life of the model.
In simple terms, $1 today will not have the same purchasing power as $1 in the future, as goods and services typically cost more over time. The figures in the above graph are shown in today’s dollars to make it easier for you to compare the amounts against today’s living costs.
The estimated retirement income is calculated on the member’s superannuation balance at the start of retirement. The calculation determines how much can be drawn each year (in today’s dollars) for the superannuation balance to run out 5 years after the member’s life expectancy (figures provided by the Australian Institute of Health and Welfare), and assumes no other sources of income (e.g. income from non-superannuation assets or Centrelink benefits).
Starting Age: 25
Retirement Age: 67
Starting Balance: $5,000 which comprises the rollover from other super funds
Salary: $50,000 pa reduced by 50% when working part time
Superannuation Guarantee: 9.5% (no SG during parental leave taken over 3 full years from age 35)
Salary Indexation: 3.5% pa
Salary Sacrifice Indexation: 3.5% pa
Inflation: 3.5% pa
Investment Option: 100% of account balance invested in: Growth (FutureSaver) returning 6.25% pa from 25 to 67 years of age. Capital Stable (Flexible Income) returning 5.30% pa from 67 years of age
All information provided in this illustrative case study is based on the specific circumstances and assumptions detailed, and is not intended as advice or a guarantee of any outcome. It is a broad illustration of the steps a member could take, but the actions appropriate for an individual will vary depending on their personal circumstances. The case study is based on current regulatory requirements and laws, including tax rates, which may be subject to change.
Investment return assumptions are for illustrative purposes only and for simplicity assume an average rate of return each year throughout the investment period. Actual returns year on year may be negative and may vary materially.
It is assumed that Tamara’s birthday is 1 July each year.
No withdrawals are assumed to be made from the super account until retirement.
Investment earnings are assumed to be applied to the starting balance each year, and credited to the closing balance annually.
Contributions are assumed to be made in the middle of each year.
Fees and taxes are factored into the assumption for the net investment return, this includes:
- Investment Fee – based on the Investment Option the member is invested in and calculated as part of the unit price (not directly deducted from a member’s account).
- Account Keeping ($1.50 per week) and Administration Fees (0.19% per annum) – capped at a combined total of $125 per month per account, deducted monthly in arrears from a member’s account.
- Indirect Cost Ratio – based on the Investment Option the member is invested in and calculated as part of the unit price (not directly deducted from a member’s account).
No deductions are assumed to have been made for any insurance premiums.
Using the starting account balance and salary, the contributions, earnings and fees are calculated using 30 June data each year to derive the closing account balance at the end of each year. The closing account balance for the previous year is then used to calculate earnings and fees on the account in the following years with the process being repeated for each year.
25-34 Joins VicSuper
- Receives a Welcome Pack and registers for Members Online
- Starts salary sacrificing $50 gross a fortnight
- Speaks to our Member Centre about consolidating her other super accounts and does this online
35-44 Takes a 3 year parental leave then returns part-time
- Stops salary sacrificing while on parental leave
- Returns to work part-time at 38 years of age on half pay - no spouse contributions as she is ineligible due to level of assessable income
- Attends a VicSuper workshop and reads VicSuper booklet showing different types of contributions, then restarts salary sacrifice contributions from approx $78 gross per fortnight
45-54 Returns to full time work
- Back to full time work at 45 and Salary Sacrifice contributions increase as per indexation
- Uses Beeline to understand how paying down their mortgage vs saving for retirement
55-67 Starts focusing on retirement plans
- Speaks to a Financial Planner to talk about her retirement plans now that she’s paid off her mortgage and other debts
- Increases salary sacrifice contributions to concessional cap
Money magazine's Best of the Best Award 2022 for Innovation and Investment Leader. The Award recognises the major role Aware Super plays in the superannuation industry and that we're one of Australia's most consistent funds for high risk-adjusted returns. It also reflects our recent innovations including the new lifecycle default product, our investment in affordable housing and our commitment to responsible ownership.
Chant West © Zenith CW Pty Ltd ABN 20 639 121 403 (Chant West), AR of Zenith Investment Partners Pty Ltd ABN 27 103 132 672, AFSL 226872/AFS Rep No. 1280401, 2022. Chant West ratings (assigned December 2021) are limited to General Advice only.
Individuals should seek their own independent financial advice, read the PDS or offer document and consider the appropriateness of any financial product in light of their own circumstances and needs before making any investment decision. The advice has been prepared without considering the objectives, financial situation or needs of any individual, including target markets of financial products, where applicable, and subject to change at any time without prior notice. It is not a specific recommendation to purchase, sell or hold the relevant product(s).
Past performance is not an indication of future performance. Chant West does not make any representation or give any guarantee or assurance as to the performance or success of any financial product based on the ratings www.chantwest.com.au for full information on Chant West’s research methodology, processes, ratings definitions and FSG.
*Canstar Outstanding Value Award – Superannuation – 2022 was awarded in March 2022 and the 5-Star Rating for Outstanding Value Superannuation was awarded in March 2020 and April 2021 for VicSuper FutureSaver. The 5-Star Rating for Outstanding Value Superannuation was awarded to The VicSuper FutureSaver product when it was part of the Victorian Superannuation Fund. From 1 July 2020, the product is offered as part of the VicSuper division in Aware Super. As the product features have not materially changed, the awards still apply to the VicSuper FutureSaver product.
SuperRatings Pty Ltd ABN 95 100 192 283 AFSL 311880 (SuperRatings), a third party company, has issued the Platinum rating to Aware Super.
This rating is SuperRatings' highest rating; for details on their ratings, criteria and methodologies see superratings.com.au.
Ratings are general advice only and have been prepared without taking account of your objectives, financial situation or needs. Consider your personal circumstances, read the product disclosure statement and seek independent financial advice before investing. The rating is not a recommendation to purchase, sell or hold any product. Aware Super has received SuperRatings' Infinity recognition as an Australian superannuation fund leading the industry in sustainable behaviour, as well as having a genuine commitment to responsible investment principles.
Past performance information is not indicative of future performance. © 2022 SuperRatings. All rights reserved.
Ratings are just one factor to consider when deciding on a product. For more information about our awards and ratings go to vicsuper.com.au/awards
Prepared and issued by Aware Super Pty Ltd ABN 11 118 202 672, AFSL 293340, as trustee of Aware Super ABN 53 226 460 365.
From 1 July 2020, this product is issued as part of the VicSuper section of Aware Super ABN 53 226 460 365. Prior to this date this product was issued by VicSuper Pty Ltd ABN 69 087 619 412 as trustee of Victorian Superannuation Fund ABN 85 977 964 496.
Financial planning advice is provided by Aware Financial Services Australia Limited ABN 86 003 742 756 AFSL No. 238430, our financial planning business, which is wholly owned by us.