Why it's important to think about super at any age

Over our lifetime, our attitudes toward superannuation - and the amount of time we spend thinking about it - are likely to change along the way.

Taking simple steps to look after your super throughout your working life is worthwhile so that your super can look after you in your retirement.

Here are some tips to help you manage your super at every age.

• During your teenage years
• In your 20s, 30s and 40s
• In your 50s
• In your 60s
• Over 60 and/or retired

The teenage years

When you get your first job, maybe flipping burgers, it can be so exciting to be finally earning money of your own that chances are your superannuation won’t get a second thought. All you need to do is fill out the form your employer gives you… right?

There ARE a few things you can do, or guide your teenager to do, in those early years of employment to get your superannuation off to the best start possible. These include:

1. Making sure that your employer is paying superannuation on your behalf and is paying the correct amount – currently 9.5% of your income.
2. Bringing your super together if you have multiple superannuation accounts from different jobs.
3. Assessing whether the amount of life insurance you are paying (deducted from your super) is the level you need at this stage of your life.
4. Checking the Salary Continuance Insurance (SCI) you might be paying and the level of cover you have.
5. Considering a co-contribution scheme to boost your super from the start.
6. Finding out if the Low Income Superannuation Tax Offset (LISTO) applies to you.

Your 20s, 30s and 40s

These decades can be a whirlwind of change - maybe including house purchases, new careers, increased responsibilities and growing families. While you may have limited time to spare, you might be starting to pay a bit more attention to the numbers on your super statement.

This is the ideal time to do your research and consider your choice of superannuation fund.

You may not have to settle for the default option from your employer – when comparing options, consider fees, investment options, performance, insurance and any extra benefits.

If you have had multiple jobs, take the time to find your unclaimed super and transfer it all into your preferred fund.

Once you have the right fund for you, don’t just leave it at that. As your life changes, your insurance needs may change as well so continue to review your level of cover and make sure your Super Death nomination is in place.

Looking for a simple way to boost your retirement nest egg? Look into salary sacrificing voluntary super contributions, which can also help you save on tax.

In your 50s

Once you reach 50, your superannuation may have more of a tangible meaning for you as you move closer to retirement.

It is a good time to determine how much super you are likely to need and plan how you can reach that target.

You might be in a position now to make additional contributions to boost your balance in the long run – work out a budget to see what you can afford.

Also have a close look at the investment options your fund offers and the life insurance premiums you are paying – you want to make sure your super is working as hard for you as possible.

At some point in your life, you might also wonder about having a Self Managed Superannuation Fund (SMSF) – as this option can require a lot of time, responsibility and knowledge, make sure you do you research and seek advice. Find out more on ASIC’s Money Smart website.  

Reaching 60…

As the regulations around superannuation change over time, familiarise yourself with the current rules and review your own retirement plans accordingly. For example, the recent changes that came into effect in July 2017 were wide ranging and largely related to your super contributions cap.

Now that you are in your 60s, you can realistically identify your proposed retirement age. Hoping to retire before the age of 60? Make sure you know the potential tax implications of doing so first.

Retired and over 60

As you prepare to retire, there are a few decisions to weigh up, including your retirement age and whether you want lump sum or super pension payments.

If you haven’t already, make a detailed budget for retirement so you know exactly how much income you need to live comfortably in your retirement.

To help prepare for a smooth retirement, also consider:

• Ensuring you have enough ‘liquid’ assets – those that can easily be turned into cash – to meet your income requirements
• Considering a ‘downsizer contribution’ (up to $300,000 or $600,000 for a couple) to your super if adult children have left home and you want to downsize your residence
• Checking whether you’re entitled to the Age Pension and Pensioner Concession Card

Whatever stage of life you are in, if you are looking for guidance on your superannuation, speak to a P&N Bank financial planner.