What is a super health check?

You can carry out a super health check yourself or engage a professional if you need help in understanding super investment strategies or guidance on comparing super funds accurately. If you wish to analyse the condition of your super yourself, it could help to prepare a checklist of items for reference. Some important things to consider include:

• The size of the contributions you’re presently making
• The performance of your super fund
• The investment strategy followed by your super fund
• The fees charged by your super fund
• Whether you have multiple super accounts that need to be consolidated

As with any financial investment, you need to look at how much you are contributing to super, how much your contributions are likely to grow, and the benefits available to you. A super health check can, at its simplest, involve making sure you are satisfied with each of these aspects. For instance, if you are eligible for super guarantee contributions, you could check if your employer is making these contributions within the necessary time frame. It’s also important to check whether the minimum contributions by your employer are adequate to meet your retirement goals. Depending on the size of the retirement fund you seek, you may want to make voluntary contributions to your super. This can be done on your own through after-tax contributions or a salary sacrificing arrangement with your employer. 

It’s also worth remembering that a super health check may not always result in taking steps to boost your super, but, if it does, you need to be mindful of any possible tax implications. It’s worth learning about the annual caps on voluntary super contributions, as crossing these caps could lead to penalties in the form of higher tax liabilities.

​​Your super fund invests your super contributions on your behalf with the aim of generating positive results. However, not all funds generate the same returns, and some tend to perform better than others. While one cannot pinpoint the funds that are likely to provide higher growth, regularly reviewing your fund’s performance and comparing it to other funds can give you a better idea of what to expect.

You can check your fund’s performance by reviewing your super statements or visiting your provider’s website. Alternatively, you can check RateCity’s comparison tables to see how your fund compares to other funds on the database. Checking a super fund’s performance over the past five or 10 years can give you a fair idea of its investments. However, remember that past performance of a super fund is not a guarantee of its future performance and it’s important to compare other aspects, including the type of fund, fees, and investment strategies, while making your choice.

It’s important to review how your super is invested and change the strategy based on the risk you are willing to take. Most super funds offer multiple investment options to members and you can choose one that matches your risk appetite and investment style. Suppose your super fund manager has adopted a balanced approach, spreading the investment equally across property, stocks, cash, and fixed interest schemes. You could opt for a growth strategy, which would push more money into stocks or property rather than cash, and take on more risk to achieve greater potential returns. 

Besides offering multiple investment options like balanced, growth or life stage options to their members, some super funds allow you to tailor your investments to focus on specific sectors. Your super fund may also let you filter out certain industries to only support the ones you consider ethical for investing. 

If you can’t find the mix of investments you need in your current super fund, you could consider changing your super fund to one that matches your investment style or preferences. However, make sure you consider the long-term implications of your choices on your retirement fund. Generally, people in their 20s and 30s prefer to take more risk with their money, and may want to invest the majority of their super into equity or shares. However, those nearing retirement often prefer a more conservative approach, taking less risk with their money while earning modest returns.

Superannuation funds charge different types of fees depending on factors such as the balance and activity in your account. Most fees are generally deducted from your returns before they reflect in your account and could significantly impact your retirement nest egg if you’re not careful. The Productivity Commission has also mentioned in a report that funds charging higher fees don’t always provide better net returns over time, which means higher fees aren’t necessarily linked to better performance. Therefore, it could help to compare the fees charged by different super funds and also their past performance and investment strategies to find a fund that’s more likely to help you meet your retirement objectives.

Some super funds also provide life insurance to members and the premium is deducted from your super fund balance. While the cost of the premium may be lower than buying a separate life insurance policy, it’s worth checking whether the coverage provided is adequate and how much you’re paying for it. It’s also worth learning about the benefits and drawbacks of insurance through super and compare your default insurance cover with independent insurance policies to make an informed choice.

A super health check could also help you check if you have a super account that you are no longer tracking and decide whether you need to consolidate your super fund accounts. Having fewer super accounts can bring down the total amount of fees you need to pay and make it simpler to access benefits whenever you are eligible to do so. You can set up or use the MyGov account offered by the Australian Taxation Office to keep track of your super accounts and balances.

 While it is not mandatory for you to review your super fund from time to time, it is a good financial habit that could help you gain better control of your retirement savings. Reviewing your fund’s performance every few months or at least once annually could help you stay on track for meeting your retirement goals and make sure you’re getting the best value for your money. If you think your super contributions are not enough to fund the type of retirement you desire, it could help to learn about other investment options or consult a financial advisor for help in growing your retirement fund.