Understandably, most want the quality of lifestyle they enjoy now to continue throughout their retirement years, free from financial concerns, to enjoy spending time with friends and family, traveling, taking up new hobbies, or relaxing.
Hence, why it is commonly referred to as your ‘golden years’! Unfortunately, cash is one thing that Australians usually end up worrying about in retirement.
In fact, over 55% of working Australians fear they won’t have enough savings to live a comfortable retirement.1
It’s important to consider ways you can boost your super while you’re still earning an income, so you can take control of your retirement savings and achieve the retirement lifestyle of your choice.
4 Effective Ways to Boost Your Super
1. Consolidate Your Super Funds and Save on Fees
You might be someone who has gone through the process of changing jobs and filling out multiple documents to get started in your new position. This could also mean you may have more than one super fund. Consolidating your super funds means combining them into one effective account. Before you decide to consolidate your super, there are a few things you should look at first:
- Check you are receiving the right amount of super payments from your employer. If you’re employed your employer should be paying you the minimum super guarantee, which is 10% of your income. You can easily check this on your payslip, through your myGov account, or directly through your super fund.
- Check to see if you hold any insurance through any of your super funds. You may have some very cost effective and valuable cover that could be lost. Do not merely change funds, you may not be entitled to receive or even implement the same cover again.
- Make sure you do your research to understand the differences in super account options and consolidate your super into a fund that suits your individual needs.
To help you make the right financial decisions with your superannuation, seek the advice of a financial adviser.
2. Choose the Right Investment Strategy and Get the Most out of Your Super
It can be beneficial for your future to take the time now to check your super fund’s investment options and decide what is right for you. What may be considered right for you, may be different to what is right for your friends or family. It’s important for you to consider your age, your investment risk tolerance, and the amount of time you have left until you’re able to access your super, when making decisions about how you would like your super invested. Here are some common pre-mixed investment options for you to consider:
- Conservative: aims to reduce the risk of losing returns, thus accepting a lower return over the long term.
- Balanced: aims for fair returns, but less than a ‘growth’ investment option, to reduce the risk of losses during poor market performing years.
- Growth: aims to provide you with higher returns over the long term but involves higher risk of loss in poor market performing years.
While it can seem safe to choose the conservative investment strategy or otherwise known as the safer option, this can inhibit longer-term performance, leaving you with a much smaller retirement balance. Depending on your age and how close you are to retirement, it may be worthwhile choosing a higher-risk option (growth or balanced); ), these options provide more volatility shorter-term but you are rewarded with higher returns in the long term. To avoid confusion and help you choose the right investment options, a Financial Adviser can educate you and help evaluate all available options, allowing you to make the right financial decisions.
3. Make Voluntary Contributions to Instantly Boost Your Super
You may be in a financial position to make extra, voluntary contributions, which will grow your retirement savings and potentially reduce the amount of tax you pay.
4. Salary Sacrifice Contributions:
This is classified as a concessional contribution, where you can request for your employer to sacrifice part of your pre-tax income into your super fund. In time, even the smallest amount of income sacrificed can make a huge difference to your retirement savings in the future. Having part of your pre-tax salary redirected to your super fund means that you pay a concessional tax rate (usually 15%), which is usually lower than your marginal tax rate. Ultimately, this means you pay less tax.
Superannuation Advice in Adelaide
Boosting your super can be quite a long process, but the results are well worth it. If you want a personalised approach on how to improve your super, consider contacting a financial adviser for advice and guidance. Need some superannuation advice? Prominent Financial Services specialises in retirement advice, they have helped many Australians secure very comfortable retirements, allowing them to enjoy their golden years free from any financial concerns.
Book an appointment now!
REFERENCES
1 https://cass.anu.edu.au/news/most-aussies-say-things-look-dire-when-they-retire
