Here are a few tips and tricks you should consider to help you maximize your superannuation.
1. Start thinking about how much superannuation you’re likely to need in retirement.
You can use an online calculator, or speak to a financial adviser.
2. Make extra contributions on top of the 9% superannuation guarantee.
Many financial advisers state that you should try and contribute 12% in total, that’s an extra 3% of your income per year.
3. Keep your superannuation fund up to date with your contact details.
This is particularly important as your yearly superannuation funds statements are usually posted to you. The information outlined in your statement can help you figure out how much extra you may need to contribute, and what strategies can be put in place to reach your super savings target.
4. Read your superannuation statements from your super fund.
These letters are a record of how much superannuation is being contributed on your behalf. Make sure you check your statement and that your employer is depositing the 9% super guarantee. The statement will also give you information on how your super fund invested your money and how it performed during the year.
5. Call your superannuation fund if you don’t understand your statement.
If there is something you don’t understand in your statement, or if contributions seem to be missing or much less than expected call your fund. In certain cases, you may want to call your employer or make a formal complaint to the Australian Tax Office (ATO) on 13 10 20 if your employer has not paid the 9% super guarantee.
6. If you have multiple superannuation funds, consider consolidating them into one fund.
Generally speaking, you’ll pay less in fees and it will be much easier to keep track of your money. However, make sure you check the termination fees first before leaving the old fund and contribution fees for joining the new one. You should also check if you lose life insurance benefits if you combine your accounts into a new fund.
7. Find out if your superannuation fund offers life insurance or income protection, and the amount paid in the event of a claim.
If the amount is not enough, or the terms and conditions do not suit to your situation, you may need to apply for additional life insurance or income protection outside the super environment.
8. Review your superannuation strategy when you get your tax done each year.
This is a great way to ensure your superannuation savings are on track and that you will have enough when you retire. You may find that your situation has changed, which may require a change in your superannuation strategy.
9. Make sure you understand investment strategies and fees used by a superannuation fund and compare these across different funds before becoming a member.
Each fund is required to list their fees and investment strategies in a product disclosure statement (PDS). Lower fees do not always mean the best fund, as good financial advice, and investment strategies may outweigh this. If in doubt, get some financial advice.
10. Get financial advice if you’re not sure what to do.
Superannuation can be hard to understand, it can be technical, filled with jargon and a multitude of strategies to suit your needs. Speaking to a financial adviser can help you understand superannuation, and what you can do to grow your super.
If you think that financial advice is too expensive, think again. It’s a myth anyone can benefit from superannuation, and the advantages far out weigh the costs. Research has shown that 94% of those with a household income below $40,000 who have used the services of a financial adviser benefited from the experience (Financial Planning Association, ‘Consumer attitudes to Financial Planning’, May 2007).
The main thing you should remember about superannuation is that the more super you have, the more comfortable your retirement will be, and ultimately the happier and less stressful your retirement years will be as well.
Everyone retires one day, and we all need enough superannuation saved up when we do decide to retire. So any strategy you can implement now to grow your superannuation will pay off in the end.