Getting your super right

Jul 14, 2021

We’re all a little guilty of neglecting our super, particularly when retirement can feel so far away. 

But decisions made today can directly impact your future financial situation so it’s worth investing the time to look into your super.

The further you are from retirement, the more time is on your side to create greater opportunities for positive growth and ensure you are better able to afford the retirement lifestyle you desire.

For more of us, super is an integral part of a retirement plan and, when managed the right way, it can be very tax effective. Ensuring your super fund is working hard for you is a good step in the right direction – particularly for women. Not only do women generally live longer than men but, the Australian Bureau of Statistics reports that, in Australia, women earn 13.4% less than the average man over the course of their career. Whether this is the result of taking time off work to care for family members or pay disparity, when women hit their golden years it’s common for a significant divide to exist between men and women when it comes to retirement savings.

The ATO reports that young women are leading the way in finding lost super with women between 25 and 35 being recorded as the most active in finding unclaimed super, accounting for more than one in five of all Australians who took action to manage their super.

For most people wanting to take control of their super, the first step is to locate lost or unclaimed super and consolidate into one manageable account to save on excessive management fees. Many of us who have had multiple employers have amassed a number of super funds over the years, and each come with their own costs.

“We really want to empower people to take control of their finances” says Tamsin McGarry, a paraplanner within the Alteris Financial Group. As a paraplanner, Tamsin assists the financial advisers in developing appropriate strategies for clients.

Tamsin believes everyone should start with setting aside enough money to cover basics and then keeping an emergency buffer. “Look seriously at your accounts, and check any old expenses unnecessarily reducing your bank balance. Then see how you can make those amounts work harder for you”.

Some of the ways that you could possibly improve your future financial situation:

Consider increasing your super contributions by having your employer pay more of your pre-tax salary directly into your super fund via salary sacrifice

Consider life insurance and income protection insurance as soon as you’re able. It can be difficult and expensive to acquire if you develop a serious illness

Check out the super co-contribution scheme where the government helps boost your savings. The initiative offers to match personal super contributions up $500 (in 2020)

Get legal advice in the event of a marriage breakdown. Changes to the law mean super entitlements may now be shared between you and an ex-spouse. You may need to check in with your family law practitioner

Look into the spouse contribution scheme. It offers a tax offset of up to $540 for 2020–21 on contributions made by a working spouse for their non-working or low income-earning partner

If you’re planning a family, research your entitlements in terms of family assistance benefits. A primary carer who earns less than $150,000 in taxable income in the previous financial year, can be eligible for paid parental leave

Where should you start? It can seem overwhelming, but it will be easier to break it down into smaller steps. Financial safeguarding can be challenging, particularly when you’re time poor, however it is thoroughly worth it.

The earlier you start, the better off you’ll be. Talk to experts and gather information, familiarise yourself with your accounts, set up super digital dashboards and check those accounts regularly, locate your lost super and fill out the necessary forms to move that money into your main account.

“I think it’s really important that women feel confident when it comes to their own financial matters” says Cassie Wilkins, also a paraplanner within the Alteris Financial Group.

It’s a good idea to set up a regular appointment in your calendar to check your financial accounts, including your super fund. Look at future projections to gain a sense of what your retirement savings will look like. Consider if additional voluntary superannuation contributions are possible. Even if you only start with a small monthly amount, it can add up over time to make a large difference.

If taking a career break due to having children or other life matters, try to keep contributing to your super if you can. These are all small steps to take but all women can implement these ideas so why not take the first step today and begin the journey of securing your future wealth.

The information in this article is general in nature and does not take into account your personal circumstances. We recommend you consult a financial adviser whose advice will consider your particular objectives, financial situation and individual needs.

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