Charge up your SUPER
Take a few simple steps now and your future self will thank you
Looking after our super is one of the most important steps we can take towards achieving financial freedom. Yet women are at higher risk of ending up with less superannuation than their male counterparts, according to recent findings from leading super fund Equip Super.
Having borne the financial brunt of the pandemic, women have been more exposed to job losses, underemployment and reduced income. Many women have been unable to contribute as much, if at all, to their super during these challenging times.
However, the reality is that just like your favourite house plant or sourdough starter, the longer you look after your super balance, the more it will grow!
CHECK YOUR BALANCE
Knowing your balance is an important first step toward feeling more in control of your super. These days, most super funds have easy-to-use phone applications or websites, so being more aware of your financial situation is just a few clicks away.
The Australian Taxation Office’s (ATO) super check tool can be used to show all of your super funds in one place, including any lost or unclaimed super, which brings us to the next step
MERGE YOUR SUPER INTO ONE GOOD FUND
More funds mean more fees, so bringing everything together into one fund could be the way to go.
To decide which fund is right for you, ATO’s super comparison tool is a great place to start. Just be aware of any insurance held before consolidating.
Once your brand-spanking new single super fund is set up, be sure to let your employer or payroll office know. They’ll likely ask you to complete a form for their records, which your new fund can provide.
GROW THAT SUPER
A great way to grow your super is by making contributions on top of the compulsory amount your employer is making each time you get paid.
First, you need to work out how much you can afford to contribute. Remember to allow for irregular or unexpected expenses. Once your budget is mapped out, you should be able to see how much you can afford to put towards your super each pay.
A second option is to work it out gradually. Start by contributing a small amount of money to your super – say ten dollars per paycheck – and gradually increase this amount until you begin to feel the pinch.
SET YOUR SAVINGS ON AUTOPILOT
Speak with your fund about salary sacrifice options. This is an arrangement between you and your employer where you agree to forgo part of your wages, with that amount being directly paid into your super account instead. Doing this means you may pay less tax on your income, while growing your super. It can be a great option, depending on your personal situation.
If you’d rather contribute directly from your savings account, you can set up regular automatic bank transfers so you don’t even have to think about it.
It is highly recommended that you speak with your fund to find out which process will best suit your personal situation and needs. There can be different benefits for either before-tax or after-tax contributions.
CHECK YOUR INSURANCE OPTIONS
Most super funds offer three types of insurance for their members: life insurance, total and permanent disability insurance and income protection insurance.
Your fund may set you up in an automatic default insurance option, which can often be more than you actually need. This means higher premiums are deducted from your account, and they can eat into your balance over the years.
Speak with your fund or review their insurance options online to make sure it’s selected based on your lifestyle and needs, and make the switch if necessary.
CHECK YOUR ENTITLEMENTS
Now that you’re growing your own super, rather than leaving it in the hands of your employer, let’s supercharge it. If you will earn less than $57,016 for the 2022-2023 financial year, the government may give you 50 cents for every dollar you contribute to your super, up to $500.
MAKE A GAME PLAN AND STICK TO IT
Retirement may feel like a long way off, but speak to anyone who has had to retire with a “less than ideal” super balance, and you will be better placed to learn from their mistakes.
Your future self will thank you for taking the time to work out how much you need to retire. The good news is that it’s very doable, and never too late to start.
There are plenty of free resources online, such as the moneysmart.gov.au retirement calculator to help you plan the retirement you deserve. After all, you’ve earned it!