Superannuation or ‘Super’ since Aussies have to shorten everything… we’ve all heard it but how much do you really know about it? Do you even know who your super account is with? Do you know what investments your super chooses? Do you know what investment allocation your super is in? Do you know how many fees you pay for your super? If you answered ‘no’ to any of these questions then this is definitely for you.
We all know the general basics of Super and that’s to make money for your retirement, if that’s even possible these days! It isn’t the sexiest topic to talk about, but with a little TLC (tender loving care) it can be pretty sexy. Wouldn’t it be more sexy if you could make your Super work harder for you? Well, you can by practicing the “3 Cs”…
Here are 3 tips you need to consider:
- Compare, Compare, Compare
If you don’t know who your fund is with, you need to find out! Your money could be sitting in a crap fund with poor investment decisions. Also, it could be a fund that isn’t even appropriate for your given situation! Worst yet, your fund could be chewing its way through your money with excessive fees meaning your money isn’t working harder for you!
Compare, compare, compare. Look at your fund and compare it against the market (other funds)… what are the fees and investment options available to meet your long-term goal of retiring? What insurance is offered and what are the restrictions? What are your funds annualised performance? Some funds let you choose your individual investments, so get on top of it and get your fund details to login to your fund account. You’ll be able to see what your money has been up to!
Just because your company has a nominated fund they pay into doesn’t mean you have to go with that fund! Ask your employer for a “Standard Choice Form”! However, there are some stipulations on this… but most employees are free to choose.
Check out RateCity to easily compare your fund against the market!
- Consolidate
Have you worked different jobs? Well, chances are you have multiple supers then. What’s worse is that your money is being chewed away at with multiple sets of fees. Who wants unnecessary fees? No one, so consolidate.
Once you’ve compared the market and chosen the proper fund it’s time to consolidate all your other funds into your main fund. If you have no idea if you have “lost super” or any other open funds then you can head over to myGov and link the ATO online services… once you do this you can get a full view of every fund in your name and consolidate! It’s that easy. If you don’t have a myGov account, make one!
- Contributions
Do you ever put extra money on-top of your company contribution to your super? If not, you should even if it’s a small amount. You can salary sacrifice by nominating some of your pre-tax income to go into your nominated fund. Remember, it’s for the long-haul and in the future you’ll be thanking yourself when you want to retire.
There’s a cap on pre-tax concessional contributions per year of either $30,000 or $35,000 dependent upon two factors… age and situation, but the benefit to this is that you pay 15% tax versus your current marginal tax rate. However, you can also make after-tax contributions, too! To get a better understanding of this head over to the Super Guide.
These are 3 very easy, simple tips that can help boost your super and make your future retirement more hopeful. Talking to a professional, like a financial planner/advisor, can help you even further with coming up with strategies and considerations for your super. If you still aren’t sure how to go about your super then seeing a professional can be the best way to go… you’ll need to be sure you get a fair deal as you’ll have to pay fees for the advice, but they may out-weigh the long-term benefits!
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