The earlier you set your super up the better – however it’s never too late to rethink your super. Once set, we tend to leave our super to its own devices. Make sure to review your super, to ensure you’re getting the best return.
Start with these tips to make sure you’re making the most out of your super.
How much super will you need to retire?
The best way to find out how much super you will need to retire is to work out what kind of lifestyle you want to live in retirement. Next you’ll need to work out how much money you will need to fund this lifestyle.
For a general idea, according to the Association of Superannuation Funds of Australia (ASFA) the retirement standard for those aged around 65 is (as of June quarter 2017):
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To check how you are tracking, use ASIC’s retirement planner.
Tips to increase your super
Could you have lost super?
Combine your super into one fund. According to the Australian Taxation Office (ATO) there is nearly $12 billion in ‘lost’ super accounts. An account is considered lost when there hasn’t been a contribution in over 5 years, or when the fund is unable to make contact with the account holder. If you’ve ever worked casually, moved house or switched jobs, it is worth finding out if you have any unclaimed super. You can do this through the ATO.
Understand the fees you’re paying and compare it with others
Depending on the super fund you are with, you will be charged different fees. You can check this in your annual statement or in the Product Disclosure Statement (PDS). Once you understand the fees you are paying, shop around and compare it with other funds to ensure you’re getting a good deal.
Consider salary sacrificing into your super
By salary sacrificing into your super account you will grow your super faster. The sacrificed amount is also not counted as assessable for income tax purposes – meaning it may reduce the amount of tax you pay.
Before making any extra contributions, take a look at your finances as a whole and make sure it wouldn’t be more beneficial to pay off your loans or debts first.
Review you super funds performance
Your employer is legally obliged to contribute 9.5% of your ‘ordinary time earnings’ to your super. Furthermore, you cannot access your super until you reach a certain age. This means that your super savings are accumulating and compounding over a long period of time – and your investment returns should be reflecting this. Review your super fund to ensure it’s delivering strong long-term returns.
Talk to a professional
Planning for your retirement is complex. Talk to a financial planner to ensure you’re getting the most out of your super. We always advise seeking advice before you act, to make sure it’s the right move for you.
For further information about the changes to super in 2017, read our blog post: How will the new changes to superannuation affect you.