Your super’s secret superpower

August 13 |  3 min

Compounding is one of the keys to successful saving – it’s returns on returns, or earnings on earnings. Generally, we’re not allowed to touch our super until preservation age, so the magic of compounding is left to do its work over many years – with employer and voluntary contributions accruing and our investment earnings all adding up to create savings for our retirement.

Compounding needs a base to work from, and our early working years currently provide this in the form of superannuation guarantee contributions. So how does it work?

More time invested, more money

When you invest a lump sum, over the year it earns a return. At the end of the year, your return is added onto your lump sum. The following year you accrue a return on both your initial lump sum and the return from the first year (assuming it is positive). In general, the cycle continues as your money grows. The earlier you start, the more time your returns have to compound, and the bigger your balance grows.

How can compounding benefit me?

Super is a lifetime investment, which is why compounding works so well in your super. You can’t generally draw on your super until later in life, so your savings benefit from many years of the compounding effect on your investment returns.

Try MoneySmart’s compound interest calculator to see how compounding could work for you.

We can help

In order to harness the benefits of compounding, money needs to be invested for long periods. Given this, you may want to increase the amount you contribute to super via personal contributions or salary sacrifice – and the government provides incentives for you to do this. Which option will work better for you depends on your income and your personal circumstances – we can help you work out which one to choose.

If you need help, contact our Member Services team on 1300 300 820 Monday to Friday 8:30am to 5pm.


August 13 |  3 min

Must Reads

Feature, Fund news, Investments, must read  |  8 min read

US Inflation

It has been over a year since COVID-19 ended one of the longest equity bull markets in US history. Governments and central banks responded quickly and, as a result, global equity markets have not only recovered but some have hit record highs.

Feature, Fund news, Investments, must read  |  2 min read

Investment update March 2021

Auction clearance rates have recently reached elevated levels and this has coincided with very strong growth in house prices across Australian capital cities.

Feature, Fund news, Investments, must read  |  2 min read

Investment update October 2020

The global pandemic has created heightened levels of concern around asset valuations, especially for infrastructure and property assets.

Feature, Fund news, Investments, must read  |  3 min read

Investment update Sept 2020

September saw positive returns as investors continue to adjust to the ‘new normal’ of the Covid-19 affected world.

Build a better future for you and your family

Invest in your future self

Sustainable products, quality advice, education and of course, low fees.

You have options when it comes to saving in your super and drawing from it on retirement. Find out which of our retirement products is most suited to you.

The Latest

Feature, Investments  |  5 min read

High Petrol Prices

With travel restrictions easing, it has become more noticeable that petrol prices have risen significantly this year.

Feature, Investments  |  3 min read

Investment snapshot November 2021

During this year, the Reserve Bank of Australia (RBA) has implemented extreme policy measures aimed at ensuring that the Australian economy recovers from the adverse impact of the pandemic.

General  |  7 mins

GM Strategy and Growth update

I’ve seen a few changes over my three decades in super, and one of those was joining Vision Super at the beginning of 2015. One of the reasons I made the move was the shared passion of the whole team at Vision Super for helping members achieve the best possible retirement outcome.

Already a Vision Super member?

The great news is you can now open your pension account online through the secure site.

Not a Vision Super member?

You’ll just need to open a Vision Personal account first and then you can transfer across to a Vision Super pension.