Retirement probably seems like a long way away for most of us. Unless you win the lottery tomorrow or your Dogecoin stocks skyrocket immensely, retirement is probably not going to be a reality for at least another 40-50 years.
While it’s not quite in sight right now, it’s important to keep at least one eye on your little nest egg of cash so you can spend your twilight years sipping margs and getting foot rubs to your heart’s content.
The most significant element of this is keeping track of how your super is performing. Most of us treat our super payments as a ‘set and forget’ kind of deal – you depend on your employer to make correct payments each month, and you might check your balance once or twice a year.
However, not all super funds are created equal, and sometimes our money might be getting pulled in different directions we may not even be aware of. We wouldn’t tolerate that sort of behaviour from our everyday transactions account, so why let our super go awry? It is the cash you’ve worked for, so knowing exactly where it is and how it’s working for you is integral to a cosy financial future.
So, here’s a few ways to know whether your super fund is potentially screwing up your chances of a Golden Girls-esque retirement.
You have multiple super accounts
By the time you’re in your early 20s, you’ve likely worked a couple of jobs. If you’ve switched employers a few times, you might have signed up for a new super fund with each job too.
When you’re holding super in multiple accounts, it’s likely that you’re doubling up on fees and maybe insurance costs across all of them too. According to the Productivity Commission, around 10 million super accounts fall under the ‘unintended variety’, where the double-up of fees is eroding members’ balances by up to $2.6 billion annually.
That’s a pretty hefty number.
Consider consolidating all your super into one account – it’s literally a five-minute job, and you’ll be able to do it via your MyGov account in a few nifty clicks. However, it is also important to be aware of the risks associated with consolidating your super too. Compare which account you think has the best performance and seek advice as to whether you’ll lose any insurance benefits before closing an account, as that could also impact the future of your retirement fund.
Your investment option is wrong
I know in this climate, the very mention of the word ‘investment’ has the ability to cause a stress-rash outbreak. However, it is worth taking the time to investigate which super investment option you initially selected.
Most super funds will offer various investment options and will allow you to swap your preference online. For example, CareSuper‘s “Balanced (MySuper)” investment option is made up of ‘a diversified mix of assets emphasising Australian and overseas shares, property and alternatives.’ This is designed to achieve solid returns medium-to-long-term. However, returns are subject to fluctuations.
Super funds like CareSuper enable members to compare and switch investment options and provide advice as to which investment option may be best for you. This will make a huge difference to how your super grows over time, so give it a crack and do your research.
You’re not with a super fund that fits your industry or values
It’s important that your super fund aligns with your own values and provides insurance benefits that fit the industry you work in. This is because certain industry funds can offer benefits and support that workers in those specific fields might need.
It might seem like the easy option to stick with the fund you were signed up to with your first casual job at 16, but taking the time to compare and switch over when your dream career begins to flourish is going to save you a lot of stress in the long run too.
The whole idea of super doesn’t have to be overwhelming. All it takes is a bit of awareness, action and advice-seeking, and you’ve probably saved yourself thousands of dollars down the line, which is exactly the kind of stress-free vibe I plan on taking into my retirement if I’m being honest.
There are also a bunch of tools on websites like MoneySmart or super funds like CareSuper. It can be a daunting thing to confront, but we’ve got so much info at our fingertips so make sure you make the most of it all if you’re looking to back yourself for your future. It’s also important to remember there’s no shame at all in asking an advisor or someone you trust for help – at the end of the day we’re all figuring this out as we go along, and the more expert advice you’ve got, the easier figuring these things out will be.
