Even when retirement is a way off, putting some work into your super now may save you time and earn you money over the next few decades.
Tip 1: Consolidate your accounts
In your teen years it’s likely you worked a couple of different jobs and didn’t pay too much attention to your super. If you have multiple super accounts now, consider bringing them all together into one so you avoid paying multiple sets of fees.
Tip 2: Make sure your super fund is right for you
Your super isn’t something you should set and forget. Look into how your current super fund is performing. Are you satisfied with it? When comparing with other super funds look at:
- Fees – Is what you’re paying in line with other super funds?
- Investment options – You can choose from a range of investment types such as shares (higher risk) and cash (lower risk). Is your current fund providing the options you want?
- Performance – How has your fund performed over the past five years compared with others?
- Service – Are you able to get the answers you want when you need them?
Moving forward things might change, so re-assess every 12 months to ensure you’re on the right track.
Tip 3: Take advantage of government initiatives
Depending on your income, you may be eligible for up to $500 a year in government co-contributions when you make personal (after-tax) contributions to your super fund. See more about government co-contributions.
By law your employer is generally required to put 9.5% of your salary into your super account. If you choose to make extra pre-tax super contributions (for example salary sacrifice contributions) you may save tax.
Pre-tax contributions into your super are, for most people, taxed at a rate of 15%, which may be less than your marginal tax rate.
Tip 4: Look at insurance options
Most super funds offer death cover, total and permanent disability cover and income protection for their members, paid out of the money in their super account.
Getting insurance through your super can be a cost effective way to get coverage if you think this is something you need.
It’s important to read through the product disclosure statement closely so you know exactly what you’re getting as coverage through your super may be limited, slower to pay and end earlier than other insurance providers.