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5 steps to a clean bill of super health

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Published on: Friday, October 19, 2018

It is especially important to give your super a check-up if your needs have changed, or if you’ve had a major life event, like buying a house, getting married, or having kids. Here are five points to get you started:

1) Lost super

Probably the best thing to start with is making sure you’ve got all your super in the once place, and that there are no little super accounts floating around from old part-time jobs that you’ve forgotten about. Fees can eat into the balance of multiple accounts, and finding any lost super is pretty easy. You can check for lost super on the ATO’s website.

2) Contributions

The next thing you might want to look at are your contributions. You should consider whether or not you can make excess contributions yourself. Even if you’re just 25 if you make an extra $50 contribution a month from your before-tax pay – what’s called ‘salary sacrificing’ – you could be more than $28,000 better off at retirement*.

And also make sure that your employer is making contributions to your account (sometimes they don’t!) and that the amount coming in is roughly equal to 9.5% of your salary. You’ll have to do that calculation yourself, but if you earn $3000 a month and you only see a monthly contribution of $50 in your super, something is not right!

3) Investment option

The next thing to have a good look at is your investment option. You might want to consider whether you want to have more equity or growth-type assets in your investment mix. Or perhaps you would prefer to be more conservative and have more defensive assets in the mix. If you’re closer to retirement ,that’s probably a good idea. 

Insurance cover 

Currently it is compulsory to have some life insurance in your superfund. This may change with a Federal Budget proposal to make life insurance opt-in for people under 25 – i.e. those less likely to need this kind of insurance.  

Either way, a health check is a good time to make sure you’re happy with the level of insurance you have within super – particularly if you’ve just started a family – and perhaps look at the other kinds of insurance we offer.

4) Beneficiary details

Finally, you need to make sure your beneficiary details are up to date. Your beneficiary is the person who receives your super if you happen to cark it. No one like to think about that, but it’s important to make sure you’ve put the right person or people down. Perhaps you’re recently married and you want to make your spouse a beneficiary, or in the happy event you’ve added to your family, you may want to add a second beneficiary. A beneficiary needs to be a dependant, that is, someone who is financially dependant on you – your spouse, your child, or somebody who was financially dependent on you at the time of your death.

A beneficiary won’t just receive your insurance payout, but also the balance of your superannuation account. You might also consider making someone a binding beneficiary. A binding nomination gives more certainty that the person you nominate will receive your benefits. 

*Assuming a superannuation balance of $10,000 at 25, a retirement age of 70, initial salary of $45,000 and investment returns of 5.3% per annum as calculated by ASIC’s MoneySmart calculator.

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