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Concerning Aussie retirement trend sparks 'wake up call' from expert ahead of $4,250 cash boost

Half of Aussies are missing out on superannuation opportunities and are being urged to act now before next year’s payment boost.

Thousands of Aussies will be getting a boost to their retirement savings next year, after the federal government revealed it would pay superannuation on parental leave payments. But before that kicks in, an expert is urging Aussies to take this step.

More than 180,000 families are set to receive 12 per cent superannuation on government-funded parental leave from July 1, 2025. This will come at a cost of $1.1 billion over four years, plus a further $600 million each year after that, the federal budget revealed.

The measure will initially add an extra $4,250 to the superannuation balance of a mum earning the median wage, according to Treasury estimates.

Find out how the 2024 Federal Budget will impact you by following Yahoo Finance’s coverage here.

Rachel Wastell and money
Mozo's Rachel Wastell is urging Aussies to take a closer look at their superannuation ahead of the government's announced boost. (Source: Supplied/Getty)

Once the paid parental leave scheme is expanded to the full 26 weeks, the Association of Superannuation Funds of Australia (ASFA) estimates balances will be boosted by around $5,100.

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Mozo spokesperson Rachel Wastell said the super changes were a “wake-up call for Australians to reassess their super fund choices”.

According to the group’s research, 50 per cent of Aussies are still with the same super fund they got when they started their first job. Only 9 per cent of people have compared super funds and gone with one with lower fees, while just 14 per cent have swapped to a fund offering better returns.

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"Choosing your super fund shouldn't be a default decision. It's concerning to see that half of Australians simply stick with the fund from their first job,” Wastell said.

"With 20 per cent of Australians admitting they've never compared funds, there's a significant opportunity to potentially boost retirement savings."

ASFA CEO Mary Delahunty said the super changes were a “crucial and long-overdue step” to improve women’s financial security in retirement.

Women currently retire with around 25 per cent less super in their nest egg than men. Data from KPMG found women walk away with a median balance of $146,900, while men retire with $204,107 on average.

For a woman who receives paid parental leave at 28 for their first child and 30 for a second child, ASFA found they would see a boost of at least $10,700 to their super balance in today’s dollars.

Under the plan, super will be paid at 12 per cent of the paid parental leave rate (which is based on the national minimum wage). That works out to about $106 per week, based on the current $882.75 per week rate.

The measure follows the government’s expansion of the parental leave scheme. Families can currently receive 20 weeks of leave. This will increase by two weeks each year until it reaches 26 weeks in July 2026.

The leave is shared between parents. Currently and for the 2024-25 financial year, two weeks of leave are set aside for the second parent who isn't using the majority of leave on a “use it or lose it” basis. This will increase to four weeks from July 2026. Single parents can get the full amount.

From July 1, 2026, superannuation will be paid at the same time as wages. So, if you’re paid weekly, your super will be paid at this time too and, if you’re paid monthly, so will your super.

This was announced in last year’s federal budget. Super is currently only mandated to be paid quarterly and Industry Super Australia has estimated the move could give millions of Aussies $50,000 more at retirement and curb the country’s unpaid super scourge.

From July this year, the super guarantee will also increase from 11 to 11.5 per cent. From July 2025, the guarantee will increase a final time to 12 per cent.

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