Superannuation. It’s one of those financial must-dos that many Australians either put off for later in life, or assume that it will take care of itself. But even the smallest decisions today can have a huge impact further down the line. Sorting out your super could be the most important step towards a happy and secure retirement. And it’s easier than you might think.

 

Did you know 40 per cent of Australians are paying too much in superannuation fees, just by having multiple super funds? If you’ve worked at a few different jobs, your superannuation could be spread across multiple funds. This makes it hard to keep track of your investments, and it means you’re doubling up on fees that could be avoided. Rolling your super into one account will save you time, money, and stress. And it only takes a few minutes. If you’ve got multiple super funds, you can transfer them into one account by logging into the Australian Government’s myGov¹ website, or contacting your preferred provider.

When you start a new job, your employer will ask you which super fund you want your contributions made into. If you don’t make a choice, they will contact the ATO to identify if you have an existing fund (known as a stapled super fund) to pay into. If you don’t have one, they can then pay your super into their nominated default fund. Taking the time to compare providers is essential, because your existing fund now follows you and your employer’s default may not always be best suited for your needs. Whether it’s a retail fund, an industry fund, or another type of super fund, fees and benefits can vary significantly – and so can your insurance coverage within the fund. ASIC’s MoneySmart website has a handy guide² to what you should look for in a super fund. And don’t be afraid to change providers if yours isn’t performing.

Just because you can’t withdraw your super until retirement doesn’t mean it shouldn’t be working hard for you. In fact, getting hands-on with your super is one of the most effective ways to maximise your benefits later in life.

 

As a rule, the younger you are – or the more time you have before retirement – the more risk you can accept when choosing an investment strategy for your super. Older Australians don’t have as many years for their super to recover from a potential loss, but taking on more risk early in your working life can be lucrative.

 

Consider speaking with a financial planner about your investment strategy and your broader financial goals. At AIA Financial Wellbeing, we offer affordable, reliable, straightforward advice that considers your financial and personal wellbeing goals.

You can boost your super balance at any time through one-off or regular payments. And you may even benefit from tax breaks in the process. If you make voluntary contributions to your super through a salary sacrifice arrangement – where your employer makes additional contributions on your behalf above the compulsory rate – these contributions are taxed at a maximum of 15 per cent, which is generally less than your marginal tax rate. Likewise, Australians can now claim a full tax deduction on personal super contributions from their take-home pay.

Whenever you’re reviewing your super fund, it’s a good idea to double check your insurance coverage. Life insurance, income protection, and total and permanent disability cover is often cheaper and easier to manage through your super than via other avenues. Contact your super provider to check your insurance coverage and premiums. When you’re comparing funds, read their product disclosure statements carefully. By choosing the right provider, and checking your insurance, you’ll have the coverage and peace of mind you need to secure your family’s future. Consider speaking with a financial adviser.

 

Be aware that when rolling over your super to another fund, you may lose the insurance associated with that account. If you want to keep this cover in the new fund, talk to you super fund first about applying to transfer the insurance. This can really go pear-shaped if not done correctly and is one of the few things that cannot be undone if cover is lost, and someone has health conditions.