This episode gives you Mia and Dinah’s top hacks for reviewing your superannuation and related insurances.
It’s easy to slip into a ‘set and forget’ mode for superannuation. Almost 70% of Australians don’t make an active choice and opt for their employer’s default superannuation fund plus there is more than $17 billion in lost super across 6 million accounts. Given that around 10% of your income is going there, it’s important not to ignore it. If you are a woman, engaging with your superannuation is particularly important: more than 80% of women are currently retiring with insufficient superannuation savings to fund a comfortable lifestyle, with average retirement balances of $80,000 less than the average for men.
In this episode, Mia and Dinah talk about using retirement calculators to motivate you to get more engaged with your superannuation. These calculators can estimate what you need for a comfortable retirement compared to your current projected balance – the Retirement Tracker on SuperGuru.com.au (run by the Association of Superannuation Funds of Australia) is a good one to check out.
Mia and Dinah also discuss good times to review your superannuation including:
- when you start a new job
- when your annual statement arrives
- when you’re going on parental leave or taking some time away from the workforce
- before the end of the financial year, particularly if you’re thinking about making some additional contributions for tax reasons
- if you get married, separated or divorced or have children.
They also talk through some of the financial fine print and jargon including:
- types of superannuation funds: accumulation funds, defined benefit funds, self-managed superannuation funds
- various investment option types: growth, balanced, conservative,ethical – and the things you should consider when deciding which option might be right for you
- types of insurance and why insurance through superannuation might be better value for you
- nominating beneficiaries to ensure your superannuation and insurance benefits would be distributed in accordance with your wishes if you pass away
They walk through the key steps in reviewing your superannuation and assessing if you may want to switch including:
- checking for lost super – log into MyGov and look in the ATO section/Super tab – any super accounts in your name will be listed, including those you’ve lost or forgotten – you can then choose to consolidate them into one account to save on fees
- reviewing your current fund to understand your current balance, investment options, fees and insurance coverage and premiums
- looking at fund performance over a 5-10 year period
- comparing your fund’s fees and performance on comparator sites such as canstar.com.au, RateCity.com.au and Morningstar.com.au
- calling your current fund and possible new funds before switching to ensure you understand the differences in insurance coverage
If you decide to switch funds the key step are:
- setup your new superannuation fund first
- advise your employer of the new fund details
- ensure your employer is making contributions to the new fund
- complete paperwork with your new fund to rollover your old fund into your new fund
Don’t forget to set up your online access and save all the details into your password manager.
Episode 30: Sorting out Life Insurance
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