Retirement
5 tips to boost your retirement savings
With many Australians concerned that they will not have enough money in their superannuation in retirement, now is a good time to make small changes that could make a substantial difference, an industry expert has suggested.
5 tips to boost your retirement savings
With many Australians concerned that they will not have enough money in their superannuation in retirement, now is a good time to make small changes that could make a substantial difference, an industry expert has suggested.
According to Dr Nick Coates, Industry Super Australia’s head of research, boosting superannuation balances can be simple and often tax-effective.
“Check you are being properly paid super, consolidate accounts, compare funds, select the right investment mix and make small contributions,” Dr Coates advised.
Dr Coates noted that consumers worried about their superannuation balances can follow five steps to help achieve a comfortable retirement.
First, check with your fund to make sure you are getting paid all your legal super entitlements, he said.
“Unpaid superannuation impacts one in three workers, and while most bosses do the right thing, there are still some employers out there who deliberately rip workers off,” Dr Coates said.
The head of research believes that as superannuation benefits continue to grow next year, the need to ensure employers are paying the right amount will become more important.
“With the super guarantee set to rise to 12 per cent, it is even more important to make sure you are getting paid your full legal entitlement and that the fund is working for you,” Dr Coates continued.
The second tip Dr Coates suggested is to consolidate your super funds into one account, noting that lost or unpaid super is simple to track by using the Australian Taxation Office tools.
Thirdly, compare your existing super fund with others in the market to make sure it is meeting your needs, Dr Coates advised, adding that fees and investment performance are important factors to consider.
“Compare funds over five years or more. The Productivity Commission found underperforming funds can cost members up to $500,000 in savings when they retire. This could be the difference between retiring at 65 or 67,” Dr Coates continued.
Four, making sure the investment strategy of the fund is right for you as it can have a big impact in retirement, according to the researcher.
“Choosing your super investment strategy is like making the perfect beach cocktail – you need to get the mix right. Make sure the investment strategy matches your needs and appetite for risk – which your fund can help you with. Also, be sure to check the insurance coverage is the right fit for you and your family,” Dr Coates said.
Five, if you get some type of windfall, consider putting it in your super fund.
“It is a tax-effective way to make savings, and with the powers of compounding interest, a little invested in super now makes a big difference in retirement,” Dr Coates concluded.
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