We outline a five-point guide to taking charge of your retirement nest egg – what to look at and how to make it work harder for you.
Got a few free hours this weekend? It’s time to pull out your super statements and go on a treasure hunt. You could be better off by up to $800,000 at retirement time.
It’s not always easy, though. According to analysis by communications firm Ethos, superannuation firms are among the worst at communicating complex information to consumers, with all the funds it assessed failing its readability test. “You want to check that those benefits are paid. There’s plenty of opportunity for error in payroll systems,” founder and director of financial literacy platform Money School Lacey Filipich says.Kelly Pilgrim-Byrne
However, a person working full-time on the average wage from 20 to 67 would gain an extra $12,475 if their super was paid fortnightly rather than quarterly, analysis by Industry Super Australia finds.“They may come back to you and say, ‘We’re meeting our statutory obligation and we don’t see any need to go any further.’ But if you pitch the case that they’re costing you money, they may be persuaded.”If you’re paying more than 1 per cent in fees, you’re probably paying too much, Filipich says.
Since July 2021, savers have also been able to use the government’s YourSuper tool to compare their fund with other MySuper funds. That’s based on a hypothetical 25-year-old with a $65,000 salary and $25,000 super balance. If that saver had their super invested in a moderate fund returning 4.4 per cent for their entire working career, they would retire with $1.4 million.If they had instead had their super invested in a more aggressive growth fund until they were 50 before switching to a balanced fund then ultimately a moderate fund at 60, they would retire with $2.2 million.
Total and permanent disability insurance pays out if the saver is incapacitated, and she says it’s generally a good idea to have this coverage. Savers approaching retirement should also pay attention to their insurance, Colonial First State head of technical services Craig Day says. Assuming a super balance of $500,000 and a salary of $120,000, that reduction in insurance premiums could deliver an extra $45,000 in super by retirement at 67“In this case, it could well be worth the cost of getting some financial advice around what level of insurance cover he actually needs as he approaches retirement,” Day says.
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