Three super myths that refuse to go away
Are you watching almost 10% of your pay go into super without really understanding what it is? If so, you’re not alone.
Super may be important but it’s not sexy. Survey after survey reveals very few Australians pay much attention to it until they’re nearing retirement.
Given the general lack of interest, it’s not surprising there are some widely held misconceptions about super.
Here are three common ones you need to watch out for.
My super contribution comes from my employer or the Government.
There’s one thing you need to understand about your super; it comes from your pay. It’s not some sort of extra payment provided by your employer or the Government.
If you’re getting paid the standard 9.5% super contribution, $9.50 for every $100 you earn is being put into a super fund, which is investing it on your behalf to help you build your retirement nest egg.
While it’s true your employer is legally required to deduct this money from your pay and contribute it into your super account, the money is essentially coming from you, not the Government nor your employer. Every dollar that goes into your super is one you’ve earned and one you deserve to get a good return on.
Sorting out my super will take hours of mind-numbing paperwork.
This may have been true in previous years but modern technology has made setting up, consolidating, monitoring and managing your super surprisingly easy.
Say, for example, you have several super funds you want to consolidate; it’s now easier than ever to bring it all together. If you have an Essential Super account, you can use our Super Sorter tool to bring your super together in a matter of minutes. All you’ll need is your other super funds details and your Tax File Number (TFN), if you haven’t already provided it.
I don’t need to worry about super until I get old
By taking just a few minutes now to sort out your super, you’ll put yourself in a better position when you’re older.
Why? Super works like a compound interest savings account. That means the sooner you get started with super, the more time your money has to grow by earning returns on your returns.
Start with the basics and avoid paying unnecessary fees by consolidating your super accounts. And make sure you keep in touch with your super by watching it as your employer puts money into your account – Essential Super makes this easy as you can see it in NetBank anywhere, anytime.
Essential Super has been specifically designed with time-poor individuals in mind. It makes it simple to do everything from opening an account to checking your current balance on your phone, tablet or desktop.
*Source: Surveys include: Investment Trends Super Engagement Report (2013), Commonwealth Bank Essential Super Un-funded account Research (2014), Commonwealth Bank Anniversary Research (2014)
This article is intended to provide general information only and does not take into account your individual objectives, financial situation or needs. Colonial First State Investments Limited ABN 98 002 348 352, AFS License 232468 (Colonial First State) is the Trustee of Commonwealth Essential Super ABN 56 601 925 435 (Fund) and the issuer of interests in Essential Super which is a product of the Fund. A Product Disclosure Statement (PDS) for Essential Super is available from commbank.com.au/super or by calling 13 4074. You should read the PDS and assess whether the information is appropriate for you before making an investment decision. Colonial First State is a wholly owned subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124 (‘the Bank’).The Bank provides certain distribution and administrative services to the Trustee. The Bank and its subsidiaries do not guarantee the performance of Essential Super or the repayment of capital by Essential Super. An investment in Essential Super is via a superannuation trust and is therefore not an investment in, deposit with, or other liability of the Bank or its subsidiaries. An investment in Essential Super is subject to risk, loss of income and capital invested.