The average Australian spends 2,555 hours a year sleeping and around 910 hours a year watching television.
So shouldn’t we be spending more than half an hour a year thinking about our super?
When the average Australian sets out to buy a car, they may spend weeks weighing up their options. Buying a house sometimes takes months, or even years, of searching, planning and saving.
Even smaller financial purchases such as stereo, DVD player or computer take more than a couple of hours of shopping around.
And yet recent research revealed that the majority of people spend less than 30 minutes a year thinking about what is usually the biggest investment they have after their home - their super.
So what’s to think about?
Many people think of superannuation as a “set and forget” part of their lives - their employer sets it up and puts money into it on their behalf and it’s not something they have terribly much control over. However, this is something of a misconception.
Even though your employer contributes money to your fund, superannuation is still your savings for your retirement. You are still able to control things such as which investment option your money is invested in and how much you contribute yourself.
It’s therefore worth taking the time to find out about your options within your super fund and thinking about how you can make them work for you.
Are you in the right investment option?
Most funds offer different investment options so you can choose the one that most closely meets your needs and retirement objectives.
If you haven’t already made a choice then your money is normally invested in the default or balanced option.. This may turn out to be right for you, but you’ll need to spend some time finding out about it and comparing it with other options on offer before you decide.
To help make a considered decision, look at:
Will you have enough?
That’s a big question. First you need to work out how much will be enough to live the life you want in retirement. Whether you’ll have that amount depends on how much super you have now, how much is being contributed to your account, the fees being charged, the returns on your super and how long you have until you retire.
There are calculators on many of the big funds’ websites that can help you to work this out.
How do you contribute more?
If you think that you won’t have enough, you can help make your super grow by adding to the contributions your employer makes. You can do this from before-tax income (salary sacrifice) or from after-tax income. A benefit of making after-tax contributions to your super is that, if you are eligible, the Government may give you a helping hand by making a co-contribution. To find out more about the co-contribution, visit www.ato.gov.au/super.
Do you have more than one super fund?
If you have more than one super fund, consider consolidating them all into one account. This can also help to grow your super because you’ll only be paying one set of fees and insurance premiums.
Before you go ahead check the exit fees, any extra benefits and the insurance arrangements of the funds you’ll be rolling out of. Sometimes the fees can be so high that it may be best to leave your money where it is. Also, your insurance arrangements may cease, or provide a different type of cover.
If you think you have more than one super account but you’re not sure how to track them down, try www.unclaimedsuper.com.au or the Tax Office’s SuperSeeker at www.ato.gov.au/super.
Do you have insurance through your super fund?
Chances are that, unless you specifically said no to insurance when you joined the fund, you will have at least minimum disability income protection and death insurance. But is it enough to meet your needs?
The first step is to find out what cover you have now and then think about whether the amount of benefit that may be paid would cover all the expenses you need it to. Although taking out insurance through you super fund is generally cheaper than purchasing it directly, keep in mind that the premiums for insurance through your super fund come out of your super account so increasing your premiums will impact on your super balance.
What other benefits does your fund offer?
Many superannuation funds offer access to other products and services, including financial products you can use long before you retire. These products may include low cost banking products, managed funds with no entry or exit fees, financial planning services and discount health insurance.
So shouldn’t we be spending more than half an hour a year thinking about our super?
When the average Australian sets out to buy a car, they may spend weeks weighing up their options. Buying a house sometimes takes months, or even years, of searching, planning and saving.
Even smaller financial purchases such as stereo, DVD player or computer take more than a couple of hours of shopping around.
And yet recent research revealed that the majority of people spend less than 30 minutes a year thinking about what is usually the biggest investment they have after their home - their super.
So what’s to think about?
Many people think of superannuation as a “set and forget” part of their lives - their employer sets it up and puts money into it on their behalf and it’s not something they have terribly much control over. However, this is something of a misconception.
Even though your employer contributes money to your fund, superannuation is still your savings for your retirement. You are still able to control things such as which investment option your money is invested in and how much you contribute yourself.
It’s therefore worth taking the time to find out about your options within your super fund and thinking about how you can make them work for you.
Are you in the right investment option?
Most funds offer different investment options so you can choose the one that most closely meets your needs and retirement objectives.
If you haven’t already made a choice then your money is normally invested in the default or balanced option.. This may turn out to be right for you, but you’ll need to spend some time finding out about it and comparing it with other options on offer before you decide.
To help make a considered decision, look at:
- How comfortable you are with receiving returns that are different to what you expected
- How long you have until retirement
- Whether you need to see financial advice.
Will you have enough?
That’s a big question. First you need to work out how much will be enough to live the life you want in retirement. Whether you’ll have that amount depends on how much super you have now, how much is being contributed to your account, the fees being charged, the returns on your super and how long you have until you retire.
There are calculators on many of the big funds’ websites that can help you to work this out.
How do you contribute more?
If you think that you won’t have enough, you can help make your super grow by adding to the contributions your employer makes. You can do this from before-tax income (salary sacrifice) or from after-tax income. A benefit of making after-tax contributions to your super is that, if you are eligible, the Government may give you a helping hand by making a co-contribution. To find out more about the co-contribution, visit www.ato.gov.au/super.
Do you have more than one super fund?
If you have more than one super fund, consider consolidating them all into one account. This can also help to grow your super because you’ll only be paying one set of fees and insurance premiums.
Before you go ahead check the exit fees, any extra benefits and the insurance arrangements of the funds you’ll be rolling out of. Sometimes the fees can be so high that it may be best to leave your money where it is. Also, your insurance arrangements may cease, or provide a different type of cover.
If you think you have more than one super account but you’re not sure how to track them down, try www.unclaimedsuper.com.au or the Tax Office’s SuperSeeker at www.ato.gov.au/super.
Do you have insurance through your super fund?
Chances are that, unless you specifically said no to insurance when you joined the fund, you will have at least minimum disability income protection and death insurance. But is it enough to meet your needs?
The first step is to find out what cover you have now and then think about whether the amount of benefit that may be paid would cover all the expenses you need it to. Although taking out insurance through you super fund is generally cheaper than purchasing it directly, keep in mind that the premiums for insurance through your super fund come out of your super account so increasing your premiums will impact on your super balance.
What other benefits does your fund offer?
Many superannuation funds offer access to other products and services, including financial products you can use long before you retire. These products may include low cost banking products, managed funds with no entry or exit fees, financial planning services and discount health insurance.
