The 5 Things to Look Out for in your Super
Most people don’t start thinking about their Superannuation until it’s too late. Here are 5 easy things you can check in your Super to make sure it’s working effectively towards your retirement.
- Fees
It’s a lot harder for your Super fund to charge exorbitant fees nowadays. Because Superannuation is such a competitive market, most providers charge relatively modest fees. However, you still might be in one of the rare ‘expensive’ ones – so make sure you check the fees of your fund. A good rule of thumb is to make sure the fund isn’t charging you a total percentage over 0.70%. For example, if you had a balance of $100,000, it would be good to ensure you are not being charged more than $700 p.a. on fees.
- Investments
Within your Super, you’ll have a menu of investment options to pick from. This is one of the most important factors on how much your Super grows over the years. Make sure you pick an investment that suits your risk profile, time frame for investment and your other investment goals (e.g. ethical investments). If your super fund doesn’t have an option with great investment performance, consider moving – and remember to think about the fees as well.
- Insurance
You can hold most types of Life Insurance inside your Super. This can make it much more affordable than paying for it from your personal income. It can also have some added tax benefits. Check if you have insurance already – and make sure the premiums aren’t eating away at your balance too much. Whilst it’s extremely important to have the right level of insurance – higher premiums might lead to less money available at retirement.
If you’re looking at getting new or more cover, consider whether paying for your policy in Super is right for you.
- Contributions
Any time you add to your Super, it’s called a ‘Contribution’. There are many different Contribution types – but the most common type is ‘Super Guarantee’ Contributions, which is where your employer is legally obliged to put 12% p.a. (from July 2024) of your salary into your Super for you.
You might not know that you can also add to Super yourself – and claim this as a tax deduction. This can be a beneficial strategy, as you get a tax deduction but are also putting away funds for long term savings.
- Beneficiaries
Beneficiary nominations allow you to specify who you want your Super to go to if you pass away. Besides your home (if you own one), Super might be the biggest asset you have, and it’s important it goes to the people you want it to. Super is unique – because if you nominate specific people, it won’t be included in your Will.
This can have some tax implications, but generally means that Super nominations are more secure (if done correctly) because they can’t be contested (like with a Will).
If you don’t have any nomination, your Super fund will try and figure out who the money should go to. They probably don’t know you personally – so this can make it a pretty hard job and one they may not get right.
So, make sure you have at least some nomination on your Super – and remember that you can nominate your Estate so that your Super is paid to your estate and bequeathed as per your Will (if you have one).
Learn More
As you can tell, Superannuation is a bit of complicated beast. Figuring out the right fees, investments, insurance and nominations can be a daunting task.
Luckily our Wealth Coaches at Wealth Maximiser are experts in Superannuation and are here to help you figure it all out.
Book a session with a Wealth Coach today – and they’ll help you make sure your Superannuation is on track.
Disclaimer
This information is of a general nature only and does not take into consideration your objectives, financial situation, or needs. Before acting on this information, you should review the Wealth Maximiser Financial Services Guide and Wealth Maximiser Terms & Conditions and consider this information in light of your own objectives, financial situation, and needs. Wealth Maximiser is operated by NobleOak Services Limited ACN 112 981 718 AFSL 286798.