Retirement
Is this super oversight costing you thousands?
A “set and forget” mentality could be costing Australians thousands of dollars, but reviewing one particular aspect could turn that all around, research reveals.
Is this super oversight costing you thousands?
A “set and forget” mentality could be costing Australians thousands of dollars, but reviewing one particular aspect could turn that all around, research reveals.
According to new research from MLC, a lack of member awareness about their superannuation risk profiles is costing Australians, and particularly young women, thousands of dollars.
To MLC general manager of customer experience, super, Lara Bourguignon, the blame lies with Aussies’ “set and forget mentality” and the solution is stronger engagement.
She explained: “Being in the right super risk profile is one of the key factors that will determine how much you have when you retire, but it’s often overlooked.
“As an example of the difference it could make, a woman aged 25 on $80,000 a year in a conservative risk profile until she’s 70 could improve her super balance by around $294,000 if she adjusted her profile according to her circumstances and life stage.”
The superannuation risk profile is a means of identifying where members sit on the investment risk-taking spectrum by measuring risk tolerance to fluctuations in investment value, MLC explained.
Members who choose, aggressive, moderate or conservative will most likely end up with different returns, but preference depends on life stage, financial position, time frame and general investment appetite. As such, most Australians will need to change their risk profile as their lives change, MLC continued.
Forty-five per cent of young women said they do not know their risk profile, something MLC considers concerning given that the average Australian woman has 44 per cent less in super than a man of the same age.
MLC said all Australians should use the Christmas break to cast an eye over their risk profiles and check that it’s appropriate.
“If there’s one thing every Australian can do right now to improve their retirement it’s to get in touch with their super fund and check what risk profile they are in, and, if it’s not right for them, to adjust it accordingly.”
MLC’s findings come from its latest Q2 Wealth Sentiment Survey, which also revealed that nearly one in five respondents had been unable to save any of their income in the last few years. Additionally, more than a quarter saved only 1-5 per cent.
When it comes to retirement, just 18 per cent of respondents would willingly use the family home to fund their golden years but 37 per cent of Australians think they won’t have enough money to retire on at all. These results are up on the 30 per cent of respondents who said they wouldn’t have enough to retire on in the first quarter of 2017.
The average Australian predicts they will need $1,124,000 in savings or investments on retirement, but thinks they will only have $721,000 outside of the family home. Low income earners predict they will require between $752,000 and $822,000 and high income earners think they will need $1,436,000.
Most working age Australians have super, but 20 per cent of those on less than $35,000 a year have a current fund compared to just 3 per cent of Australians with incomes exceeding $100,000.
RELATED ARTICLES
Superannuation
Superannuation guarantee rate rises to 12 per cent as parental leave changes take effect
The superannuation guarantee rate has increased from 11.5 per cent to 12 per cent from Tuesday, with super contributions also being added to Commonwealth Parental Leave Pay for the first time. Read more
Superannuation
Rest's Sustainable Growth option achieves highest sustainability classification
Rest superannuation fund has achieved the highest sustainability classification for its Sustainable Growth investment option from the Responsible Investment Association Australasia. Read more
Superannuation
Aware Super slashes admin fees for retirees by up to 25 per cent
Aware Super has reduced administration fees for members with a retirement income account by up to 25 per cent and lowered the maximum annual fee. Read more
Superannuation
SuperAPI co-founder criticises Labor's superannuation tax as 'sneaky tax on young people'
The co-founder of SuperAPI has labelled Labor's proposed tax on superannuation balances above $3 million as a "sneaky tax on young people, tomorrow" disguised as a policy targeting wealthy retirees ...Read more
Superannuation
Election policies could reshape Australia's superannuation landscape, expert warns
Competing superannuation policies from Australia's major political parties could have significant implications for investors and retirees, according to a financial expert. Read more
Superannuation
Industry leaders weigh in on concessional super tax as Budget confirms $55bn investment
Changes to the taxation of superannuation earnings and contributions have drawn mixed responses from financial and payroll sector leaders, as the Federal Budget confirms over $55 billion in ...Read more
Superannuation
Call for indexation on super tax cap as $3m threshold draws criticism
A senior executive in the superannuation technology sector has criticised the Federal Government for failing to index the proposed $3 million superannuation tax cap, arguing the measure will unfairly ...Read more
Superannuation
Rest members back calls for fairer superannuation rules ahead of Federal Budget
Rest has called on the Federal Government to implement superannuation reforms aimed at improving fairness across the system, after member survey results showed strong support for a range of proposed ...Read more
Superannuation
Superannuation guarantee rate rises to 12 per cent as parental leave changes take effect
The superannuation guarantee rate has increased from 11.5 per cent to 12 per cent from Tuesday, with super contributions also being added to Commonwealth Parental Leave Pay for the first time. Read more
Superannuation
Rest's Sustainable Growth option achieves highest sustainability classification
Rest superannuation fund has achieved the highest sustainability classification for its Sustainable Growth investment option from the Responsible Investment Association Australasia. Read more
Superannuation
Aware Super slashes admin fees for retirees by up to 25 per cent
Aware Super has reduced administration fees for members with a retirement income account by up to 25 per cent and lowered the maximum annual fee. Read more
Superannuation
SuperAPI co-founder criticises Labor's superannuation tax as 'sneaky tax on young people'
The co-founder of SuperAPI has labelled Labor's proposed tax on superannuation balances above $3 million as a "sneaky tax on young people, tomorrow" disguised as a policy targeting wealthy retirees ...Read more
Superannuation
Election policies could reshape Australia's superannuation landscape, expert warns
Competing superannuation policies from Australia's major political parties could have significant implications for investors and retirees, according to a financial expert. Read more
Superannuation
Industry leaders weigh in on concessional super tax as Budget confirms $55bn investment
Changes to the taxation of superannuation earnings and contributions have drawn mixed responses from financial and payroll sector leaders, as the Federal Budget confirms over $55 billion in ...Read more
Superannuation
Call for indexation on super tax cap as $3m threshold draws criticism
A senior executive in the superannuation technology sector has criticised the Federal Government for failing to index the proposed $3 million superannuation tax cap, arguing the measure will unfairly ...Read more
Superannuation
Rest members back calls for fairer superannuation rules ahead of Federal Budget
Rest has called on the Federal Government to implement superannuation reforms aimed at improving fairness across the system, after member survey results showed strong support for a range of proposed ...Read more
