A super health check is important to stay on top of your super. Even though you have a long way to go before retiring, wouldn’t it be nice to know that your super is already on track? And that you’re making the most of your efforts to increase your super while maintaining a comfortable standard of living now?
Why you need to do a Super Health Check
Superannuation, commonly referred to as “super,” is an essential part of every Australian financial plan. It provides a means to save and invest for retirement, ensuring a secure future when the time comes to leave the workforce. However, just like any other financial aspect, it’s crucial to periodically review and assess the health of your superannuation fund. In this blog post, we’ll explore the importance of conducting a superannuation health check and provide you with some practical tips to optimise your retirement savings.
Understanding how Superannuation Works
Superannuation is a retirement savings system in Australia that requires employers to contribute a percentage of an employee’s salary into a superannuation fund. Members can make voluntary contributions to their super as well. These funds are invested and grow over time and are taxed at concessional rates, providing individuals with financial support when they retire. It’s essential to actively manage your superannuation to ensure it aligns with your retirement goals and maintains a healthy financial position. Generally, superannuation being for retirement purposes is not accessible unless one of these conditions of release has been met:
- has reached their preservation age and retires
- has reached their preservation age and begins a transition-to-retirement income stream
- ceases an employment arrangement on or after the age of 60
- is 65 years old (even if they haven’t retired)
- has died.
Having met a condition of release, members are able to access their super and generally do this in the form of a pension.
Why Conduct a Super Health Check?
Performing a super health check offers numerous benefits for securing your financial future. Firstly, it allows you to maximise your retirement savings by reviewing your fund’s performance, fees, and investment options. This ensures that your money is working effectively for you and can lead to higher returns.
Assess Your Retirement Goals
Conducting a superannuation health check allows you to evaluate whether your current contributions and investment strategy are aligned with your retirement goals. It provides an opportunity to adjust your savings plan if necessary to achieve the desired outcome.
Ensure Adequate Contributions
Checking your superannuation helps ensure that you are making regular and sufficient contributions. By understanding how much you’re contributing and comparing it to your retirement goals, you can determine if adjustments need to be made to bridge any potential gaps.
Review Investment Performance
Superannuation funds invest your contributions in a range of assets. Periodically reviewing the performance of your investments helps you determine if they are delivering the returns you expect. It may be necessary to rebalance your investment portfolio or explore alternative options to optimise growth potential.
Minimise Fees and Charges
Superannuation funds charge fees for managing your account. Conducting a health check allows you to review these fees, compare them to other funds in the market, and make informed decisions about potential cost savings without compromising the quality of service.
Tips for a Successful Super Health Check
- Consolidate Multiple Funds: If you’ve changed jobs over the years, you may have accumulated multiple superannuation accounts. Consolidating these funds into a single account can make it easier to manage, reduce fees, and provide a clearer picture of your overall retirement savings.
- Review Insurance Coverage: Many superannuation funds offer life insurance, disability cover, or income protection insurance. Assess your insurance needs and determine whether your existing coverage is appropriate or if adjustments are required to ensure comprehensive protection.
- Seek Professional Advice: Superannuation can be complex, and seeking advice from a financial planner or superannuation expert can provide valuable insights into optimising your retirement savings. They can guide you through the health check process and offer tailored strategies based on your circumstances.
- Take advantage of tax-efficient strategies and government benefits, such as salary sacrificing, co-contributions, downsizer contributions,, and tax-deductible member concessional contributions.
- Stay Informed: Keep up to date with changes in superannuation regulations, contribution limits, and investment options. Regularly review your superannuation fund’s communication materials and seek reliable sources of information to make informed decisions. As of February 2023, the Australian Taxation Office reported there is $16 billion in lost and unclaimed super across Australia. You can check if any of this lost or unclaimed super belongs to you by accessing the ATO online services through myGov.
Conducting a superannuation health check is a vital step towards securing a comfortable retirement. By assessing your retirement goals, contributions, investment performance, and fees, you can make informed decisions to optimise your superannuation fund. Take the time to review your superannuation regularly, seek professional advice when needed, and stay informed about developments in the industry. Remember, a healthy superannuation fund today lays the foundation for a prosperous and worry-free retirement future.
If you want expert guidance and assistance with conducting a comprehensive super health check, consider reaching out to our team at Wardle Partners Accountants & Advisors. Our team of experienced professionals specialises in helping individuals navigate the complexities of superannuation and develop tailored strategies to optimise their financial outcomes. Contact us today to schedule a consultation and take the first step towards securing your financial future. Remember, proactive planning today can lead to a more secure and prosperous tomorrow.