When it comes to money, Australians are interested in two basic things: owning their own home and retiring comfortably.

It’s the second one that’s concerned me lately: most awareness of superannuation is aimed at the family-and-mortgage people in their thirties and forties, and the pre-retirement panickers in their fifties and sixties. But what about people in their twenties?

The decisions they make now could be the difference between tens of thousands of dollars when they retire. Superannuation is required to be paid to employees at 9 per cent of their salary; it goes into a complying super fund where the earnings enjoy a sizeable tax break which allows it to accumulate faster. So there’s all this money flowing into super accounts, yet many young people don’t know where their super is going. I urge young people to take control of this situation and become informed – it could mean a lot of extra money in the future.

For a start, know which super fund your money is going into. It doesn’t have to be your employer’s fund. You can ask around, do your homework and use the internet to see which funds are best for you. Secondly, if you’ve worked more than one job, go to the SuperSeeker search engine in the ATO’s website and find any super that’s owing to you from a former employer (there’s $18 billion in unclaimed super at the moment.)

Put it all into one account where it will be easier to manage and more cost effective. Then you should do two things: firstly, put some extra into super to augment the employer’s contribution. Even a small amount extra each week could mean a big difference in your retirement balance. Secondly, do your homework and select which investment option you want your super going into within your super fund.

If you don’t select one, the super fund will usually select a ‘conservative’ or ‘balanced’ investment option, neither of which might perform the way you want them to. It’s important to get this right because this selection also means a difference of tens (or hundreds) of thousands of dollars over forty years. Because you are young, you can ride out the volatility of share markets and still capture the higher returns. So you should probably select a high growth fund which invests in Australian and international shares.

A ‘conservative’ fund, with mostly cash and government bonds, will be steadier but deliver a lower return on your funds.It’s your job to assess your own risk profile but you must start by being informed. And remember: when you’re young, the biggest risk may be that you don’t make large enough returns by playing it too safe.

Mark Bouris is the Executive Chairman of Yellow Brick Road, a financial services company offering home loans, financial planning, accounting and tax and insurance. Email Mark on mark.neos@ybr.com.au with any queries you may have or check www.ybr.com.au for your nearest branch.