You’re climbing the employment ladder, mingling in the social scene, meeting ‘the one’, and the last thing on your mind is retirement. But once the fun begins to slow down, you start to think about the future – don’t leave it too late!
Your super is the key to living comfortably in retirement, yet many of us let our retirement dreams slip away by falling into some common, and easy-to-prevent, super traps.
Here are the top five, most common super mistakes and some useful tips on how you can avoid them.
1. Don’t lose track of your super
Remember that part-time job you had when you were 15? And that other one when you were 18? And then there was that casual job you held briefly in between? That was back when you didn’t know (or care) what super was; it was just something you ticked on the employment form on your first day of work.
There are now over 3.4 million lost super accounts worth more than $16 billion.1 So if you’ve ever changed your name, switched jobs, or done casual work, chances are you might have lost some of your super without even realising it! Remember, every little bit counts – it could be time to do some digging.
2. Don’t keep more than one super account
Fees, fees, fees. If you have different super accounts, you could be chipping away at your super savings by paying multiple fees and insurance premiums. It pays to keep your super in one account; it also makes it easier to keep track of your super when you change jobs.
It’s important to keep in mind that you could be charged withdrawal fees when you consolidate your super so it’s best to seek advice before doing so.
3. Don’t assume your employer’s fund is right for you
Every Australian employer has to offer their employees a default super fund, and for many, it could be the right choice. Sure, it might be easier, you don’t have to think about it or do any research, and it’s all ready to go. But if you’d like more control over how your money is invested, you might prefer a fund that offers more investment choice.
4. Don’t rely solely on super guarantee contributions
Your employer must contribute 9.50% of your salary to super each year under current laws. But research shows that at this rate, the average wage earner won’t even have half the super they need for a comfortable retirement. It’s worth considering options like pre-tax salary sacrifices or personal contributions from your take-home pay to help grow your super nest egg.
5. Don’t leave it too late to boost your super
No matter how far away retirement may be, it’s a good idea to start building your super sooner rather than later. Because even the smallest increase now could have a huge impact in the long run.
Come in and see us for more information on how you can get your super working just right for you – after all, your super is your future!
1 Lost and Unclaimed Superannuation Money, Discussion Paper, Australian Government Treasury, June 2013.