Time for a Superannuation Check-Up
Time for a Superannuation Check-Up: Is Your Retirement on Track?
The new financial year has begun, and with it comes important changes to superannuation from 1 July 2024. These changes make now an ideal time to give your super a check-up. Your superannuation is likely one of the biggest assets you’ll ever have. Regularly checking in on it can help you stay on track for a secure and comfortable retirement.
Why Regular Superannuation Check-Ups Matter
Your superannuation is a long-term investment that can have a significant impact on your retirement. Keeping a close eye on it ensures you are making the most of your contributions and not paying more in fees than necessary. Additionally, changes in legislation, like those in 2024, can affect your super balance, so staying informed is essential.
The superannuation guarantee rate increased from 11% to 11.5% on 1 July 2024. This means your employer now contributes more to your super based on your ordinary time earnings. The concessional and non-concessional contributions caps have also increased, allowing you to potentially boost your retirement savings.
Steps to Take for a Superannuation Check-Up
To ensure your superannuation is on track, consider the following steps recommended by the ATO:
1. Update Your Contact Details
Ensure your contact details and tax file number (TFN) are current with both the ATO and your super fund. Outdated information can lead to lost super or missed communications about your account.
2. Review Your Super Balance and Contributions
Regularly check your super balance and monitor your employer’s contributions. Your employer is required to pay your super at least every three months, though some may pay more frequently. You can check your balance through ATO online services or directly with your super fund.
3. Search for Lost and Unclaimed Super
If you’ve changed jobs, names, or addresses, you might have lost track of some of your super. Lost super occurs when your fund cannot contact you, while unclaimed super has been transferred to the ATO. You can search for lost and unclaimed super through myGov.
4. Consolidate Multiple Super Accounts
If you’ve had multiple jobs, you may have more than one super account. Each account charges fees and may include insurance, so consolidating them can reduce costs and simplify management.
5. Check Your Nominated Beneficiary
Ensure you have a valid death beneficiary nomination with your super fund. This nomination isn’t covered by your will, and without it, your super may not go where you intend. Some nominations expire every three years, so check if your fund offers non-expiring options.
Evaluate Your Super Fund’s Performance and Fees
Regularly reviewing your fund’s performance and fees is crucial. Ensure that the investment options align with your stage in life, risk tolerance, and values. If you have insurance through your super, confirm it still meets your needs. High fees can erode your retirement savings, so compare your fund’s fees with others in the market.
Do You Have Enough Super for Retirement?
Determining whether you have enough superannuation is highly personal. The Association of Superannuation Funds of Australia (ASFA) provides a general guideline, suggesting $690,000 for a comfortable retirement and $100,000 for a modest one. These figures assume part Age Pension eligibility, home ownership, and good health.
However, your specific needs may differ. If you plan to spend more on travel or dining out, you’ll need to adjust these estimates.
Tailoring Your Superannuation Estimate
For a more personalised projection, use online tools like the MoneySmart Superannuation Calculator. This tool considers your age, desired retirement age, and expected fund performance. Many super funds offer their own calculators, providing more detailed forecasts. However, these rely on assumptions that may not perfectly match your situation.
The Age Pension: A Safety Net, Not a Solution
While the Age Pension provides a safety net, it may not offer the lifestyle you desire. As of 1 July 2024, the Age Pension for a couple is $43,752 per year. Relying solely on this income could result in a restrictive budget, limiting your retirement aspirations.
Seeking Professional Advice
The most accurate way to assess your superannuation needs is by seeking professional advice. A financial adviser can consider factors like your health, life expectancy, inflation, and investment returns. They can provide a customised forecast tailored to your unique circumstances, helping ensure you’re on track for the retirement you envision.
Conclusion
A superannuation check-up is essential to maintaining your financial health and ensuring your retirement is secure. With recent changes to superannuation rules, now is the perfect time to review your super balance, contributions, and investment strategy. While online tools and general guidelines offer a good starting point, seeking professional advice is the best way to ensure your super is working hard for your future.
Taking these steps today can help you make better decisions, avoid unnecessary fees, and ultimately achieve the retirement lifestyle you desire. Don’t wait—schedule your superannuation check-up and make sure your future is on track.
Addition Resources: Superannuation Growth Strategies: How to make the most of them.