Small amounts can add up to a great future if you put a little extra into super each year.

Accessing your super or living on a pension can seem a lifetime away when you’re twentysomething, so it can be hard to see the point in taking an interest.

But when it comes to super, time is a currency just as valuable as money. And that mean your early working years are the best time to build up big savings for more security in life after work.

How it works

Building up savings early is all about taking advantage of the way compound interest works.

When you give super 30 years or more to grow with investment earnings and inflation, you don’t need to deposit great sums of money. A little extra every month early on in your career can build up to something great.

According to ASIC’s MoneySmart super calculator, putting away $4000 per year (around $75 a week) would boost your super balance by nearly $150,000 when you’re ready to retire.

Making habits

The early stages of your career can be a time when you experience a great leap in income, particularly when your transition out of study into work.

While we all have different financial needs, starting full-time work for the first time is a great opportunity to establish savings habits before you acclimatise to having the extra money around.

Every time you receive a pay rise, it’s a good idea to put half of your additional income straight into savings. That way, you’ll have more to spend both today and tomorrow.

Why save for super, and not a super holiday?

Retirement might not be your first financial priority early on in life.

But think of it this way: superannuation isn’t about retirement. It’s about having the money you need to leave work without having to change your lifestyle later on.

And putting money into super is one of the most tax-friendly ways to earn on investments and build long-term savings.  When you invest money directly into shares, your earnings could be taxed up to 30 per cent or more. Investment earning through super are taxed at 15 per cent.

Making the most of super’s tax advantages, particularly when you still have time on your side, is a small change you can make today to build a better tomorrow.