A super-health checklist: what cardinal super sin are you committing?

If you’re in the habit of simply letting your super chug along in the background as you move through your career, you’re certainly not alone. But you could be doing yourself a disservice. 

Whether you’re at the beginning, middle, or final stretch of your career, making a regular effort to consider the health of your super could be just what it needs to fulfil its potential and set you up with a comfortable and rewarding retirement.

According to Sunsuper’s Manager of Advice Best Practice, Evan Poole, “it doesn’t matter what age a person is, there are things they could be thinking about when it comes to super”.

“It’s the small changes that a person can make, that can have a big impact on their super balance,” Mr Poole said.

“Contributions, investments, fees and insurance can all make a big difference to your super in retirement – and the earlier you begin, the greater the difference could be.”

If you’re keen to get the super ball rolling but don’t know where to start, you might like to consider the following super-health checklist:

1. Find your super

According to the Australian Taxation Office (ATO), around four million Australians held two or more super accounts at 30 June 2020. Many of these fund members are unaware of their duplicate accounts. Which is why tracking down any lost super is an important first step in taking control of your retirement savings.

Fortunately, by linking your myGov account to the ATO, you can see all the details of your existing super accounts, even the ones you may have forgotten about.

“Considering and understanding where all your super is with a quick ATO search is the first step in good super hygiene,” Mr Poole said.

Learning the whereabouts of your savings puts you back in the driver’s seat and enables you to make an informed decision on where you want your money to go.

2. Consolidate your funds

Once you’ve located any misplaced super in duplicate accounts, you might choose to roll them into one.

“Considering consolidating your accounts is easy and can save you money on multiple fees and insurances,” Mr Poole said.

Your myGov account again makes this easy once you’ve linked it to the ATO. Simply click on the super tab in the ATO section, identify the fund you want to have as your primary super account, and select the option to transfer the money from the other account(s) to this one.

3. Check your statements

According to Mr Poole, another simple action you can take is checking your super fund’s annual statement each year.

“When checking your annual statement, make sure that you have adequate insurance cover and are happy with your investments,” he said.

“Perhaps also consider your contribution levels – do you need to make extra contributions to grow your nest egg?

“If you feel you need help to manage your super, financial advice can help. Sunsuper offers personal advice about these super issues, most often at no additional cost for members.”

4. Track your goals

If you’re still in the early stages of your career, you may not have yet put much thought into setting goals for your retirement. But the earlier you act, the more time you’re able to give your super to reach its full potential. Setting and tracking your goals can allow you to make decisions along the way.

Mr Poole suggests the frequency at which you should be thinking about your super depends on what you’re checking for.

“Check quarterly if you are concerned about whether your employer is contributing, and do an annual check to see if you are on track for your desired retirement outcome,” he said.

“Making small changes like adding extra contributions or changing your investment options can make a big difference.

“Similarly, annually check things that will reduce your super balance, such as fees and insurance premiums. It may be worth working with a financial adviser to help you undertake these reviews.”

5. Take action

Depending on where you are in your career timeline, there are things you can do to help ensure you are making the most of your super.

According to Sunsuper’s Evan Poole, early in your career, it’s worth looking at the following:

• Contributions
• Government contributions and offsets and tax strategies
• Investment options and performance
• Insurance needs and costs
• Fees
• Account consolidation

“There are significant benefits to engaging with your super early,” he said.

“Compounding interest on your balance means that small contributions made today can have big benefits over time.”

The same considerations could also be made for those in mid-working life, along with making projections to retirement and considering the adequacy of their super balance.

“As you approach retirement, strategies like transition to retirement can help you add significantly more to your retirement savings, or alternatively may help you reduce your working hours and gain greater flexibility prior to retirement,” Mr Poole said.

“At and in retirement, the focus will be on how best to provide for your retirement income needs – should you use a retirement income account, access one-off lump sums, and are you entitled to all or part of the government aged pension?”

Mr Poole said there are other moments that should prompt you to think about your super, too.

“Those key life milestones (like establishing a mortgage, or having kids) are a good time to look at your super,” he said.

“Annually checking your super in retirement is also important in order to consider if you are happy with the way your money is lasting, whether you want or need to take more and what impact that is likely to have on the longevity of your savings.”

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