Super-serious

Superannuation = retirement = way too far in the future to think about. Yet it is likely to be your biggest investment. So it pays to gain a better understanding.

As always – the advice below does not substitute expert advice from a tax consultant or an investment planner. Always seek out professional advice before making a decision.

Consolidate In general terms, every employer in Australia has a requirement to place money into a superannuation fund. Think about your early jobs at fast-food chains, supermarkets etc. It is likely that you filled in all your paperwork as a new starter and as part of it, opening up multiple superannuation funds. The ATO can help you find your lost superannuation. Transferring the funds into one superannuation account, will help you in multiple ways: firstly you lose less in fees, secondly it can make an impact on your bottom line when it comes to interest. If you have $600 in an old bank account, why wouldn’t you collect it? Yet every year, the extent of unclaimed superannuation is in the order of tens of billions.

Make your super work for you Did you know that many superannuation funds have things like life insurance, benefits for loss of employment or disability? Investigate those options as they often come out of your employer superannuation funds, rather than your immediate wallet. It could save you heaps. Of course, you need to check what your superannuation fund charges, but why not get the coverage sooner without impacting your take-home pay?

Next of kin Your superannuation fund will have the option for you to identify a next of kin, in the event of your death. It is not a mandatory component and often has to be specifically identified. Considering that in a lifetime, your superannuation balance will be quite significant, it is important to ensure that those important to you can get access. Currently, if you have a next of kin identified, the funds can be released much quicker than going through a will. Not only that, the funds will not be considered part of your assets for determination of whether probate is required. The simple message – no fees extracted and faster provision of funds.

Additional payments If you are relying on a government welfare as part of your retirement, then you need to seriously consider. Even though the age of retirement may increase, with an aging population, the extent of government resources will most likely reach a tipping point. So your superannuation is critical to life after work. Every-so-often the government announces options to match super payments. Unless you are in the industry, then you are likely to miss this with the usual May Budget rhetoric. Free money is after all free money. Consider whether you can afford to make extra payments now.

How much do you need for a comfortable retirement? The Association of Superannuation Funds of Australia's latest retirement standard showed for singles looking to have a comfortable retirement they would need $41,830 a year in retirement and for couples they would require $57,195 per year (2014). Plan to live 10 years? 15 years? 30 years? Multiply it out.

I’ve heard lots of sayings. The most common is that by the time you are 30 years old, your superannuation balance needs to be greater than $100,000. For many, this is not a reality. However if you get yourself organised and take a greater interest, you may just come out for the better. Just talk to anyone close to retirement now… they will tell you how much they wish they got on top of their superannuation earlier… So every time you get a superannuation statement, take the time to read it. Closely. Government sites: Lost superannuation: https://www.ato.gov.au/Individuals/Super/Keeping-track-of-your-super/Finding-lost-or-ATO-held-super/

How much is enough? https://www.moneysmart.gov.au/superannuation-and-retirement/how-super-works/super-contributions/how-much-is-enough