Australia’s Superannuation Guarantee System Limiting the Financial Security of Millions of Younger Australians

The Superannuation Guarantee (SG) system was introduced in 1992 by the Australian government to ensure that Australians have access to long-term retirement savings. It requires employers to contribute 9.5% of an employee’s salary into a super fund, with the contributions being taxed at 15%. These contributions are then invested in the super fund, and the returns on the investments are tax-free.

Unfortunately, this system is limiting the financial security of younger Australians who are missing out on the benefits of the system. As such, millions of younger Australians are missing out on thousands of dollars of superannuation benefits.

How the SG System is Limiting Financial Security for Younger Australians

Younger Australians are missing out on tens of thousands of dollars in retirement savings because of the SG system, which focuses on the elderly and ignores younger Australians. It fails to take into account the changing job market, where younger Australians tend to switch jobs or take up part-time/casual work, thus missing out on contributions. Additionally, the system does not protect funds in a superannuation account against market volatility, resulting in insufficient funds for retirement

How the SG System Could be Improved

The SG system could be improved in several ways in order to benefit younger Australians. It should be made more flexible, so that those who change jobs or take up part-time/casual work can still benefit. It should be more accessible, allowing those who are unemployed to also benefit. The system should be made more secure, protecting funds from market volatility.
Lastly, it should be made more transparent, so that younger Australians can easily gain an understanding of how it works. These changes could help ensure younger Australians benefit from the SG system.

The Benefits the SG System Provides to the Elderly

The SG system provides a number of benefits to the elderly. It provides an additional source of income and tax-free income to cover living costs. The funds in a superannuation account are protected from market volatility, giving peace of mind in retirement. Lastly, it provides a means of saving for the future, helping the elderly plan ahead

Challenges Faced by Younger Australians

Despite the benefits of the SG system, there are a number of challenges that younger Australians face when it comes to saving for their retirement. Firstly, they may find it difficult to contribute to their superannuation accounts on a regular basis, as they may not have a steady source of income. Secondly, they may not have access to the funds in their superannuation accounts until they reach retirement age, which means that they may not be able to benefit from the funds until then.
Thirdly, they may not have sufficient funds in their superannuation accounts to draw upon in their retirement years, as they may not have taken advantage of the benefits of the SG system. Finally, they may not be aware of the various tax concessions and benefits that are available to those saving for their retirement, which means that they may not be making the most of the system.

Government Programs to Assist Younger Australians

The Australian government has implemented several initiatives to help younger Australians save for retirement. These include the Superannuation Guarantee requiring employers to contribute 9.5% of salary to super funds, the First Home Super Saver Scheme allowing access to super funds for a first home purchase, the Pension Loan Scheme allowing individuals to borrow against their superannuation funds, and the Pensioner Concession Card providing benefits and concessions to those in retirement. The government’s intention is to help Australians save for their retirement and ensure they are able to benefit from the SG system


By understanding the benefits and challenges associated with the SG system, as well as taking advantage of the various government programs and schemes available, younger Australians can ensure that they are better prepared for their retirement years.

How soon will you onboard your team?