We all want to live well in retirement, so let's look at what you need to do to build a bigger superannuation balance.
These tips are a great place to start, but they are only the tip of the iceberg when it comes to optimising your superannuation. Contact your Yellow Brick Road financial adviser for individual advice about making the most of tax concessions, rebates and financial incentives to grow this vital retirement nest egg.
1. Check fund performance
Different funds meet different needs, so it's essential to size up your fund against your long term goals. Are you comfortable with the fees and costs charged in correlation to the level of services and investment options? How well has your fund performed over the last five years? Also, look at the insurance benefits provided, including the level of life, disability and income protection cover.
2. Watch the fees
Ideally, you want your money going towards investments, not fees. A small difference in fees now can add up to a massive difference over 20 or 30 years. There's no parallel between high costs and good performance, so look carefully at what is charged. An excellent place to start is your fund's website, where there should be an explanation of the purpose of each fee.
3. Move to one account
If you have changed jobs over the years, chances are you have several super accounts open. Save account keeping fees by consolidating these multiple accounts into one. From 1 July 2019 super providers will be required to identify inactive low-balance accounts to the Australian Taxation Office (ATO) and report and pay the unclaimed super money.
The longer it takes to get around to tracking down your super and moving to one fund, the more dollars wasted on unnecessary fees that could be going towards your retirement savings. Lost and unclaimed super can be found using ATO online services.
Before you bail out of a fund, check its death, disability and income protection insurance cover. Not all funds offer the same level or types of insurance cover so it's worth investigating what you might be losing, particularly if you have a pre-existing medical condition.
4. Maximise your contributions
By making regular contributions – either tax-deductible or after-tax – you can maximise your investment earnings. No matter what age you start, making additional contributions to your super can have an impact on your final balance. If you can spare some salary, use salary sacrificing to move a portion of your pre-tax salary into super each month. Also, consider making additional contributions to your super from your after-tax income.
5. Check how much your employer is paying
It’s not unheard of for employers to make mistakes when paying super into employers’ accounts. Check directly with your fund to help calculate how much you should be receiving, then make a habit of keeping a watchful eye on your account.
6. Expert advice
Expert advice can make it easier to find a fund that suits your needs. The right adviser can increase your knowledge of your investments, advising you about possible tax concessions and eligibility for government super-schemes like the Super co-contribution.
A Yellow Brick Road financial adviser will help you assess your superannuation as part of a personalised plan to build, manage and protect your wealth based on your long term goals.
**The information on this article contains general information and does not take into account your personal objectives, financial situation or needs. If you require further information don’t hesitate to contact the branch directly.