Superannuation Health Check: Is Your Super on Track for Retirement?
Superannuation is one of the most important financial assets youll ever have. Yet, many Australians rarely review their super to ensure it aligns with their retirement goals. A super health check helps you assess whether your super fund, investment strategy, and contributions are on track to provide financial security in retirement. This guide outlines the key steps to review, optimise, and maximise your super for long-term financial success.
Why a Super Health Check is Essential
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Ensure Youre on Track for Retirement: Your current super balance will significantly impact your future lifestyle. Regular checks help determine if youre on course to meet your retirement goals.
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Optimise Investment Strategy: Adjust your super investments based on your age, risk tolerance, and personal goals. This ensures that your super is working as hard as possible for you.
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Reduce Fees and Maximise Growth: Identify unnecessary costs and ensure your super fund is performing well. High fees can erode your super balance, so its crucial to keep them in check.
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Identify Lost Super: Many Australians have unclaimed or forgotten super accounts. A health check helps consolidate these accounts, maximising your retirement savings.
Step-by-Step Guide to a Super Health Check
1. Check Your Current Super Balance
Start by logging into your super account. Check your current balance, recent contributions, and fund performance. Use online calculators to estimate whether youre on track.
Tip: The ASFA retirement standard suggests a single retiree needs around $50,000 per year for a comfortable retirement, while a couple needs approximately $70,000.
2. Review Your Super Investment Strategy
Your superannuation is invested in financial markets, and its growth depends on your investment choices. Consider the following options:
- High Growth: Best for young investors seeking higher returns but willing to take on more risk.
- Balanced: A mix of growth and defensive assets for moderate risk and return.
- Conservative: Lower risk and stable returns, suited for those nearing retirement.
Takeaway: Ensure your investment strategy matches your risk tolerance and retirement timeline.
3. Compare Super Fund Fees and Performance
High fees can significantly reduce your final retirement savings. Check your funds annual fees, management fees, and investment fees.
Tip: Use resources like the APRA heatmap or Chant West ratings to compare fund performance. Even a slight difference in fees can cost you thousands in lost super growth over time.
4. Boost Your Super with Additional Contributions
If youre behind on super savings, consider making extra contributions:
- Salary Sacrifice: Pre-tax contributions reduce your taxable income while boosting your super.
- Government Co-Contribution: If you earn under a certain threshold, the government may match your contributions.
- Spouse Contributions: You may receive a tax offset for contributing to your partners super if they earn less than you.
Takeaway: Small additional contributions can significantly increase your retirement savings over time.
5. Locate and Consolidate Lost Super
Many Australians have multiple super accounts, leading to unnecessary fees. Use MyGov to find lost super and consolidate into one account.
Tip: Be cautious when switching funds; some super funds include important insurances that may be lost.
6. Review Your Insurance Inside Super
Most super funds include default insurance, but it’s essential to check if it suits your needs:
- Life Insurance: Provides a lump sum to your family if you pass away.
- Total Permanent Disability (TPD) Insurance: Covers you if you become permanently disabled.
- Income Protection Insurance: Offers income replacement if you cannot work due to illness or injury.
Takeaway: Ensure your insurance is appropriate for your financial situation. Too little may leave you exposed, while too much may lead to high premiums.
When Should You Do a Super Health Check?
Aim to review your super every six months. This is especially important when changing jobs to avoid accidentally opening multiple accounts. After major life events—such as marriage, children, or a career change—consider adjusting your investment strategy and withdrawal plans.
Takeaway: Regular check-ups help maximise growth, minimise costs, and ensure financial security in retirement.
Final Thoughts
A superannuation health check is vital for ensuring your super fund, investment strategy, and contributions are on track to meet your retirement goals. By reviewing your funds performance, fees, investment choices, and insurance options, you can significantly impact your final retirement savings.
If you want to make sure your super is on track, consider speaking with ActOn Wealth. Our experienced financial advisors in Melbourne can provide tailored strategies.
