January 8, 2019
Why bother managing your super? Well, if you don’t stay on top of it you could be losing out.
People underestimate the value of their super; often viewing it as some mysterious extra on their contract that will pay out once they hit 60. The reality is that like all of your finances, if your Super is not properly managed, it can crumble.
Being aware of the ins-and-outs of your Super fund is actually very easy. Just follow this simple guide to stay on top of your Super.
To get started, check out our top 3 tips for managing your Super fund effectively:
1. Avoid unnecessary fees
The best way to conserve your money for the future is by being aware of any optional, additional fees which you can avoid. One additional fee that could be included in your Super is life insurance. Once you’re over 25-years-old, your Super fund should send you a letter asking you to reply if you wish to opt out of the life insurance extra. If you wish to have life insurance, then this could be a great additional benefit to your Super fund. Just make sure you’re not paying two life insurance policies at once.
2. Rollover to one fund
Paying double, triple or even quadruple the fees? It’s important to have just one super fund. Over the years, the employees you work for will sign you up to their company’s nominated super fund, unless you provide them with the details of your existing fund. Ticking the box to select their fund rather than filling in your current Super fund details is easier; but with regular fees and without continuous contributions to your other Super funds, you overall funds can diminish. It is important to keep track of how many Super accounts you have and try and rollover the accounts into one key account with your ideal Super fund.
3. Track your super
To consistently stay on track with your super, it’s a good idea to download your fund’s app and monitor all contributions and fees. If you are moving into a new company, you want to make sure they are making your Super contributions. If your company isn’t adding contributions, then you are losing out on the interest that would be accumulated from those contributions.
Be aware that it can sometimes take companies 2-3 months to have the finance go through. If you haven’t received your contributions, be sure to highlight this with your company’s HR and if things cannot be resolved internally, then you can contact the ATO to report your employer. But be cautious, as if you are still working for this employer then reporting them could create potential friction. On top of that, you may be shocked by the level of taxes you are paying, but you do pay less tax on your Super than the rest of your income.
When it comes to managing your Super fund, it is important to select the right fund for your needs. You can choose between a nominating a fund that will manage your super on your behalf or a Self-Managed Super Fund.
4. Finding the lowest fee super funds
We recommend checking which funds are Industry SuperFund. These are funds that only benefit members, have low fees and have never paid commissions to financial planners. Then, compare each Industry SuperFund to find the best fit for you. HostPlus is currently a strong performer, but it’s ideal to check and compare different funds’ performances and products for yourself to see if it is a right fit for you.
5. Opting for a Self-Managed Super Fund
Creating your own Self-Managed Super Fund (SMSF) comes with many benefits, such as being able to control where your Super is invested. By doing this, you can hopefully gain a higher return and depending on your super fund, managing your own fund could end up being less costly. However, it can be more time consuming and requires dedication as there are a lot of legal and financial requirements and less protection as you cannot access government compensation schemes. Regardless, SMSFs are popular with entrepreneurs, small business owners and avid investors. These people usually already have an accountant and/or financial advisor on the books who can support them throughout this process. If you are considering managing your own SMSF, think about the commitment you are making and your obligations as the manager of your fund.
It is important to do your research and track your Super. Once you have your contributions setup with the fund you want, it is easy to monitor how your Super is performing.