- 1. Choose your fund, if you wish
- 2. Get to know your super fund
- 3. Choose your investment options, if you wish
- 4. Choose the right level of insurance
- 5. Decide how much you want to contribute
- 6. Make additional super contributions by salary sacrificing, or making tax-deductible contributions
- 7. Keep an eye on your employer
- 8. Keep watch over your fund’s trustees or become a trustee yourself
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 (Superannuation Guarantee).
If you’re self-employed, your super future is left entirely in your hands, which can be either exciting or daunting.
The ‘8 steps to super success’, set out below, is a practical tool to help you make the most of your superannuation.
1. Choose your fund, if you wish
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’re already in may be the best choice for you. For more information on comparing super funds, why try not our other 8-step program: see SuperGuide article How to compare super funds in 7 easy steps.
2. Get to know your super fund
There are plenty of no-cost ways you can use to 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. For more information on getting to know your super fund see SuperGuide article SuperGuide checklist: 10 ways to save your super.
3. Choose your investment options, if you wish
Most of Australia’s major superannuation funds give you different levels of choice about where to invest your super. For more information on super fund investing see our special section: Is my super fund performing?, and the following SuperGuide articles:
- Superannuation investing: How does it all work?
- Want investments that help you sleep? Understand your risk profile
- Superannuation investment: What is the difference between a balanced and growth option?
- Portfolio disclosure: What’s your super fund investing in?
- Investment performance: Assess your super fund in 4 steps
- Super control: How to switch your super account’s investment option
- SuperGuide’s Investment Performance Reckoners: How do they work?
- Super pensions: choosing an investment option in retirement
- Investment returns after retirement: Understanding the 10/30/60 Rule
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. For more information on life insurance and your super account see the following SuperGuide articles:
- Life insurance through super: A definitive guide
- Insurance inside super: A definitive guide
- Comparing super funds: Top 20 cheapest funds for life insurance
- Comparing super funds: Top 20 cheapest funds for 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. For more information on super contributions see the following SuperGuide articles:
- 2018/2019 guide to concessional contributions (before-tax super contributions)
- 2018/2019 guide to non-concessional contributions (after-tax super contributions)
- Boost your super: 10 planning tips for 2018/2019 year
6. Make additional super contributions by salary sacrificing, or making tax-deductible contributions
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. For more information on salary sacrificing see SuperGuide article Salary sacrifice and super: How does it work? . Since 1 July 2017, employees can now make tax-deductible super contributions (if salary sacrificing is not available or not convenient): see SuperGuide article Guide to tax-deductible superannuation contributions.
7. Keep an eye on your employer
You can check your super fund to see when your employer paid your Superannuation Guarantee contributions. For more information on SG see SuperGuide articles Superannuation Guarantee rules for employers and Super for beginners, part 18: My employer hasn’t paid my SG. What can I do?.
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 trustee 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, that is a self-managed super fund, you are the trustee of your fund. For more info on SMSFs, start with our SuperGuide article How to evaluate whether an SMSF is right for you