Superannuation is the money you are saving for your retirement. If you are working, it is almost 10% of your pay so it is important to keep an eye on such an important investment. (Remember: this is NOT financial advice, always consult a financial advisor to discuss your decisions.) Here are 17 bright ideas to keep in mind when thinking about superannuation:
Take an active role in managing your superannuation. Don’t just think ‘out of sight, out of mind’. This is an important financial investment in your life so you need to think about it, no matter how old you are.
Consider combining all your super accounts into one account. If you have had many jobs, you may have several accounts that all get charged management fees. Combine your super into an account you have chosen.
Find any lost super. The ATO has a Superseeker website or there are other sites like Find My Super that can help you locate these unclaimed accounts. You worked hard for that money, don’t let it escape.
Do your research – where are you putting your money? Look at how the funds have performed, who has lower fees. Make sure you are getting the most out of your managed fund.
Know what you need to retire. It may seem like a long way away sometimes but take the time to find a financial target to aim for. You will need to live off this money for 20-30 years. Consider your current financial situation, where you want to live, will you want to take a holiday once a year? There are many calculator tools on the web to help you like the one provided by the government on their Money Smart website.
You might want to consider adding a little extra (if you can). You may be able to do before tax (salary sacrifice) or after tax where the government may make a co-contribution. A little now can add up later on to make a big difference. Speak to your financial advisor to see what suits your current situation.
Even if you work part-time or you are self-employed, you can still look at making your own contributions to your super account. There may be some tax benefits. Check out the ATO website for more details.
If you want more information, go see a financial specialist. This becomes more important the older and closer to retirement you get. Don’t leave it too late as superannuation is a long term investment.
Understand where your money is going. A superannuation account is basically a big account of money (yours and other peoples) that is looked after by a financial institution or individual. It is important to know what they are doing with your money and how it is being invested. Money could be invested in the stock market, property, currency. Certain investments have higher risk while others may have less return. Understand what suits your situation best.
There is an option to manage your own super. There are several companies who can help with this, such as Self-Managed Super Institute. You need to do lots of research to see if it is right for you as there are conditions and much more work involved.
Keep up to date with Superannuation regulations. The government is constantly changing the rules and regulations for superannuation in Australia. Don’t just zone out, make an effort to visit the ATO website regularly to find out what is happening.
Just because you are not the breadwinner in your household doesn’t mean you need to stay out of any discussions on superannuation. Talk to your partner about what they doing with their superannuation and have regular conversations about how it is going.
Make sure your Tax File Number (TFN) is attached to your super. You could get hit with penalties if you don’t supply your TFN.
Look at different strategy depending on your age. If you are close to retiring and will need your money within the next 5 years, you may want to look for lower risk options to protect your investment. If you are young and have more time, you could look at options for investing for the long term. Get some professional advice if you are unsure what is best for your situation.
Know who you are giving your money to. It is sad but true, there are people out there who try to take advantage of others. Even if you are great friends with someone, don’t just hand over your money. Always ask lots of questions and do research before you accept any offers and remembers, if its sounds too good to be true, it probably is. Visit the ASIC website to help you with your background checks.
Keep your contact details up to date with the fund (or funds) you are with. If you know who your money is with, it is much easier to keep them informed of how to contact you.
Read your annual statements. How many people get their superannuation statement and just file it without even taking a look. Even if you do give it a glance over, most of the time most of us just put it in a file. Next annual statement, really look at it. Understand how your fund had performed and what fees you have incurred. If you are not happy, give your fund manager a call and ask questions.