At the same time, it’s often a concept that seems such a long time away that we don’t think much about it, let alone actively plan for it.
However, with average life expectancy on the rise, Australians are now facing having to work longer in order to save enough for their retirement.
Superannuation is a key part of our retirement as it is likely to be the main source of income we will live off once we stop working.
Depending on how long you’ve been working and what your situation is, you may have built up a sizeable amount in your super, which looks quite impressive on the surface.
But once you break it down into a monthly budget, the reality could look quite different and you may realise it won’t be enough to ensure a comfortable lifestyle.
Whatever stage of life you are in, it’s never too late to get on top of your super to get a better idea of what your retirement might look like.
Here are some steps you could consider to help get your super on track:
1. Review your current super
Take a look at the more recent statement from your super provider and see how much super you have. Compare this to previous balances and check how much was added in the last 12 months. You should examine any fees that you may be paying and assess if they look reasonable and what you expected. If not, you might consider switching super funds. In addition, if you have insurance through your super, check that it is still the right level of cover for your needs. Just make sure you don’t switch super providers before you have carefully considered the implications of losing any existing insurance cover you have in your current super fund.
2. Consider consolidating multiple super accounts
If you’ve changed jobs more than once, you may have more than one super account, which means you have money sitting in different places. The first thing you should do is make sure you know how many accounts you have, and if any of them have existing insurance cover that you might want to keep. Once you know that, you might want to consider consolidating your super into one account. Once you have identified the right ‘final’ account, the others can be moved across quite easily through your chosen super fund, or via the myGov website. Make sure you close the unused accounts so you don’t keep paying unnecessary fees or duplicate insurance premiums.
3. Review your goals
You can check to see if you’re on the right track with your super by using an online retirement calculator, which will assess how much money you will have in retirement based on your current contributions, investment options, fees and planned retirement age. Mortgage Choice has a free Retirement Income Calculator that you can use to check whether your current retirement strategies are working for you. You can find it here.
4. Look at your options
You could also consider options that might help you improve your retirement savings. This might include making extra contributions to your super through salary sacrificing or making direct deposits from your bank account. If you’re not satisfied with your current super fund, you might want to consider switching to a different provider. Just remember to check your existing insurance cover with your current super fund before moving though!
Whatever stage of life you’re at, start the ball rolling on planning for your retirement today. If you need further assistance, contact your local Mortgage Choice financial adviser.