More often than not when you receive your annual superannuation statement, you may check the final number, if at all, and then file it away for future reference. While it doesn’t need to be reviewed constantly, every now and then it may be worthwhile to do a ‘health’ check up on your super. In particular there are some key things to look out for:
How much are you paying for your super? Don’t just look out for the obvious dollar amount fees but there are also indirect investment fees which come out of your investment returns before they are credited to your account. Are you paying a financial advisor you don’t know, for advice you never receive? As a rule of thumb you should hopefully be paying less than 1% in fees.
Are you taking on the correct amount of risk? Each person has their own tolerance to risk. Higher risk gives you a greater chance of increased returns with a higher chance of negative returns. Lower risk has less volatility but possibly lower returns. Those earlier in their working lives could usually afford to take on more risk as they have a greater amount of years to recover from negative years. Those approaching retirement may consider reducing the risk depending on their overall financial position.
Do you have any? Should you have your insurance structured here and what other insurance policies do you have? There are implications for having certain types of cover within superannuation and this should be further investigated with a Risk Insurance Advisor.
Contributions and account balance
Do you have enough super for your future and should you be making additional contributions? A Financial Advisor should be able to advise you on the tax implications of contributions and how much you may need to contribute to achieve your future goals. The standard employer contribution is insufficient to provide you with a comparable retirement to the income you are earning through your life.
Do you have correct beneficiaries listed as to whom you want to receive not only your superannuation balance but also your insurance benefit upon death? You should also note that only certain people are eligible to be nominated as beneficiaries so you may have made an invalid nomination. Your nomination needs to be in line with what you may have written in your will, so discussing this with your estate planning lawyer or advisor is important.
Superannuation can often be your biggest asset and therefore deserves a bit of attention every now and again.
If you need assistance with your superannuation planning, please feel free to send me an email at firstname.lastname@example.org or call me on 08 8409 4333.