An $85,000 salary is close to the Australian full-time median, and 25 years to retirement is a realistic mid-career horizon, so this scenario shows what the compulsory super system builds on its own.
The Scenario
- Current super balance: $50,000
- Annual salary: $85,000
- Employer super guarantee rate: 11.5%
- Voluntary contributions: $0
- Years until retirement: 25
- Expected return: 7% (1% annual fees)
The projected balance above is calculated by the Australia Superannuation Calculator, compounding the starting balance and yearly employer contributions at the net-of-fees return, so it is the real output for these inputs.
What This Means
The employer puts in $9,775 a year at the current rate. Compounded at a net 6% for 25 years, alongside the $50,000 already there, the balance is projected to reach roughly $751,000, of which about $457,000 is investment growth on the $294,000 of contributions. Two things pull the real number down from this: the 15% tax on contributions going into the fund, which the calculator does not subtract, and fees, where the gap between 1% and 0.5% compounds into tens of thousands over this period. Voluntary contributions and a rising salary push the other way.
Try Your Own Numbers
Change the salary, contribution rate, fees, or timeframe in the Australia Superannuation Calculator. To see how much of your pay packet is left after tax to fund extra contributions, run it through the Australia Income Tax Calculator.