Merely thinking about your super means you’re straddling the first major hurdle that most Australians face when planning (or not) for their retirement and looking into your future.
As an employee, you have your employer helping you with your retirement plans by making compulsory super contributions.
If you’re self-employed, your super future is left entirely in your hands, which can be either exciting or daunting.
The eight-step program to super success is a practical tool to help you make the most of your superannuation. Consider following this program to achieve success with your super:
1. Choose your fund
Since 1 July 2005, most Australians have been able to choose their own fund. You may even decide to set up your own super fund. Or, you may be one of the minority who still are unable to choose the type of fund you wish to join. Note that the fund you’e already in may be the best choice for you.
2. Get to know your super fund
There are plenty of no-cost ways you can get to know your super benefit and your super fund by doing a little bit of leg work and asking a few questions. Every superannuation fund member needs to do this as a bare minimum, even if you’re not interested in getting more involved with your superannuation investment. Your fund may also offer you other benefits such as low-cost financial planning services and cheaper home loans.
3. Choose your investment options
Most of Australia’s major superannuation funds give you different levels of choice about where to invest your super.
4. Choose the right level of insurance
If you become ill or have an accident, paying your everyday bills is a bigger concern than saving for your retirement. Most super funds now offer competitive premiums for death or disability insurance, and income protection insurance.
5. Decide how much you want to contribute
Contributing to your super fund is where you can have the greatest control and flexibility over your super, whether you’re an employee, self-employed or not employed. Making personal or voluntary contributions can mean a bigger retirement benefit, which means you decide what your retirement lifestyle can be rather than relying solely on the Government Age Pension.
6. Make additional contributions by taking advantage of salary sacrificing.
If you’re an employee, a tax-effective way of topping up your super may be to use salary sacrificing, which is another way of describing the fact that you’re paying your additional super contributions out of before-tax dollars.
7. Keep an eye on your employer
You can check your super fund to see when your employer paid your superannuation contributions.
8. Keep watch over your fund’s trustees or become a trustee yourself
The annual report you receive from your super fund contains the names of your trustees and, usually, gives you some idea of the skills they hold to do the job. If you’re an employee and you belong to a fund run by your employer, you may be able to select your fund trustees. If you run your own fund, you are the trustee of your fund.