In the recent Wealth Radar Podcast, there was some great information regarding superannuation and five crucial things to consider when reviewing your superannuation.
After listening to the Podcast, one thing that it really highlighted was that, unfortunately, superannuation is not simple and that if you want to ensure that your superannuation is structured appropriately and that you are making the most of this important asset, then you make sure that you seek out some professional advice.
With the Superannuation Guarantee payment from all employers going up to 10.5% this year and increasing up to 12% by 1 July 2025, your superannuation will become, for most people, their most important retirement asset. As Paul and Jason outlined, there are some key issues that you need to be aware of:
What investment option/s am I invested in? Do I know how these options are invested? If I am in a Balanced Fund, is it the same as every other Balanced Fund?
What do I pay in total fees and costs? Are these costs easy to find? What are an implicit cost and an explicit cost?
What insurance do I have through my superannuation? If this insurance was automatically given to me, do I know what it covers me for and does it come with pre-existing condition clauses?
How do I nominate where my superannuation goes if I die? What is a Binding Death Benefit Nomination, and who can I make one of these to?
If I do pass away, how is my superannuation taxed? Can it be paid as a lump sum or a pension, and to who?
There are many questions raised above, and not all of them are necessarily important to all people at any one point in time. Still, they are all issues that, at some point in your life, will become important and once again, this highlights that need for advice so that you are making the most of your superannuation throughout your working life and beyond.
Looking back at my time as an adviser and also someone who has a superannuation account, one easy and simple tip but one that has the most significant impact is to start early and always, always contribute extra to superannuation if possible. Many people and specific organisations heavily promote picking a fund based on fees and, to some extent, returns, and while these two items are essential, the most significant impact you can have on your superannuation over time is CONTRIBUTIONS!
Even if it is just an extra $20 per week, then my answer is YES, contribute. Please get advice about how to make, such as Salary Sacrifice or after-tax member contribution, but YES, contribute. Additional superannuation contributions have a far more significant impact over and above fees and returns, and it is something that you can control.
So what are the key things to consider when reviewing your superannuation?
- Get professional advice, as superannuation is not simple!
- Additional contributions will always provide a benefit, no matter how much!
Paul Horn
