Q: I’m new to Australia and I have no idea where to start with my super in order to have the best outcome 40 years from now. So far, I have had my super spread between 3 industry super funds, as organised by temp employment agencies. I know this is not the way to continue, but I am not sure who to trust to point me in the right direction. I plan on working, living, and retiring in Australia and want to organise things properly from the beginning to avoid losing money in the future. Help? Thank you!
A: You are asking the right questions which means you’re off to a great start. Fortunately, you have access to many free resources to help you navigate your way around the super system, including a few useful websites (such as SuperGuide.com.au).
You can also read the money/financial sections of the daily newspapers although they can sometimes be ‘light on’ for superannuation content. Obviously there are some useful books available, depending on how deep you want to go into the subject (more on books later).
Some preliminary steps for super beginners
Here’s a few preliminary steps that anyone can do to familiarise themselves with their super benefits.
- Find all of your super funds. If you know the names of each of your super funds, your account numbers, and your account balances then you can make a decision whether you plan to consolidate your super benefits into one account. The following SuperGuide article can assist you further: Find lost super in 4 steps, and make quick cash.
- Get to know your super fund/s. Most of the major super funds provide useful information about super, and your specific benefit. The following SuperGuide article can assist you further: Super for beginners, part 11: Is my super fund good enough?
- Ensure each of super funds has your tax file number. If your super fund doesn’t have your TFN, your employer’s contributions are hit with extra tax, and you cannot make any after-tax (non-concessional) contributions. The following SuperGuide article explains the super and TFN rules in more detail: Super for beginners, part 14: Save tax – supply TFN to your super fund.
- Choose a super fund. If you do decide to have a primary super fund, then you need to decide which super fund that is going to be, and arrange for any further super contributions to be paid into that account. You can also arrange for benefits sitting in other funds, to be transferred to your chosen fund. I explain some issues to consider when selecting a super fund in the article Fund choice: Comparing super funds in 8 steps. You can also check out any of the articles in the Comparing funds section of the SuperGuide website.
- Consider your investment options within the fund. The majority of fund members have their super money invested via a ‘balanced’ investment option which is designed for the average fund member with 10 or more years to retirement. I explain some of the issues involved when comparing a super fund’s performance in the following articles:
Useful websites for super beginners
The following websites are useful free resources for anyone learning more about super:
- SuperGuide. Obviously, SuperGuide (www.superguide.com.au) , a free and independent site for consumers
- ATO. The Australian Tax Office has a special superannuation site (www.ato.gov.au/super ) that explains your Superannuation Guarantee (SG) entitlements, the co-contribution rules, and lots of other stuff including super taxes, retirement and making extra super contributions.
- MoneySmart. ASIC’s consumer site, MoneySmart (www.moneysmart.gov.au). This site has excellent calculators that you can use to work out how much you need to save for your retirement.
- Rating companies (SelectingSuper, SuperRatings, ChantWest). Each of these sites contains information on superannuation and most importantly some nifty lists of the top performing super funds.
- National Information Centre for Retirement Incomes (NICRI). This government-funded site (www.nicri.org.au) provides free information on retirement planning.
Useful books on superannuation
If you’re interested in obtaining a book on the topic of superannuation, then visit a bookshop and head to the ‘money/finance/business’ section and have a look at some of the books that are available. Of the 12 books that I have written, I believe the two books that would be of most use to you at this early stage in your retirement planning are:
- How to make $300,000 without trying! (30 ways to save your super) ($7.95 Wilkinson Publishing). This book also explains HOW to implement the preliminary steps mentioned earlier in this response.
- Super Freedom: A woman’s guide to superannuation. Learn how to create a worry-free financial future in 6 steps ($32.95 Wrightbooks)
You can find out about these books and my other books by clicking on this link.