SUPERCHARGE How $10 a day turns into $450k

Sean FitzGerald says he has missed out on significant financial gains by previously having underperforming funds and multiple insurance policies. Picture: David Caird AUSTRALIANS who delay retirement saving until they turn 50 risk missing out on up to $450,000 of future wealth.

A MoneysaverHQ analysis has found that an average worker aged in their early 30s can boost their projected final retirement balance from $523,000 to $980,000 by depositing an extra $10 a day into super and switching to a lower-fee, higher-growth fund.

Someone aged in their early 40s could grow their final retirement balance from $437,000 to $732,000 by making the same changes, according to the analysis based on data from the Australian Securities and Investments Commission and Association of Superannuation Funds of Australia (ASFA).

Even $5 a day adds between $224,000 and $340,000 at retirement thanks to the power of investment returns compounding every year.

It’s why super specialists say that your 30s and 40s are a crucial time to start thinking about super and saving.

However, many people don’t start until later in life, says Novo Wealth adviser Paul Garner.

“The biggest thing young people have in their favour is time,” he said. “That’s more important than investments, return or structure.

“If you put a little extra away for 35 years it’s going to be much DAVID AND LIBBY KOCH: Why you need a mentor and how to find one

more powerful than trying to put away a lot over 10 years.”

ASFA says to retire comfortably today, a single person needs $545,000 and a couple $640,000 in super. In future dollars – after three decades of inflation – that equates to about $800,000 and $1 million respectively.

National Australia Bank’s head of advice and professionalism, Keiran McIlwain, said people in their 30s and 40s should review investment strategies, understand investment risks and benefits, seek advice and examine their insurance.

“It’s important to set a long-term investment strategy that aligns your super and all your other investment options to ensure it would have a significant impact on your ultimate retirement balance,” he said.

Big savings can be made by

consolidating multiple super funds to stop money being drained by management fees and insurance premiums.

Consultant Sean FitzGerald, 47, has started taking a more active interest in his super and is consolidating several funds opened by previous employers.

“Not only have I missed out on significant returns through keeping underperforming funds, but I have also quadrupled my insurance costs and fund fees – by having four funds – for no benefit,” Mr FitzGerald said.

“At an employee level there is very little focus, conversation or

guidance around your superannuation performance.”

Roll-it Super CEO Mark MacLeod said 12 million Australian workers held 28 million super accounts.

“For workers in their 30s and 40s, it is easy to collect super fund accounts as you progress your career across a few employers,” he said.

“For most of us, consolidating your super takes less than five minutes. Log in to the member online portal of your current super fund, head to ‘find my lost super’ and the super fund will do the work from there.”

Mr MacLeod said people should not passively accept their employer default fund option.

“Actively selecting a highperforming super fund can more than double your retirement savings,” he said.

“Outside of the family home, it is the most important financial decision of your life.”