The end of a financial year is an excellent time to check in on your personal finances to see whether there are simple and easy changes you can make to better secure your future.
The good news is that there are often relatively easy and quick things that can be done – irrespective of what stage you are at in your career – which can increase the likelihood of living the life you want in retirement for both yourself and your family.
Super in the early stages of your career
Starting your career is a very exciting time of life. Those years of study have finally paid off and anything is possible.
Understandably, at the start of your career, planning for retirement is likely to be low on the list of priorities, but there are still some initial financial steps you can take to ensure your superannuation is working for you.
- Check your super balance: Check that your employer is paying you the correct amount of super, and that it is being paid into the superannuation fund that you nominated.
- Choose the best fund: If you did not nominate a fund and have instead been allocated a default fund, look into whether this fund is the right one for you.
- Consolidate multiple accounts: A lot of new professionals worked multiple jobs to get through university and received superannuation as part of this work. Now is the time, through some very easy and quick steps, to take that super out of all those different accounts and roll it into the one account. By doing so, you stop paying fees on multiple accounts. Before you close an account make sure you are not losing insurance. legalsuper can assist you with consolidating your different super accounts into the one place.
- Make voluntary contributions: Consider making some small additional voluntary contributions to your super on top of that which your employer must pay as part of the Superannuation Guarantee. If you set up good saving habits early on, they will stand you in good stead for the rest of your life – and the more you have in your account the more you also benefit from compound interest increasing your balance.
Mid-career choices
Having established yourself in the workforce, and now possibly with a partner, family, and mortgage, it is a good time to see how you can make your super work even better for you.
- Investment options: Most super fund members are invested in their fund’s ‘default’ investment option. Speak with your fund to determine whether it is time to make a change, including moving from a more “balanced” or “conservative” approach to something a bit more “aggressive” or “assertive”. Most funds offer a range of investment options to suit your appetite or needs. legalsuper offers 12 investment options, plus a Direct Investment option, and you can read more about this at https://www.legalsuper.com.au/investments/investment-options
- Insurance: It is a good time to review the types and levels of insurance you have. Circumstances change over time, and the appropriate level of death, disability and/or income protection insurance for you and your family may have changed too.
- Nominate a beneficiary or beneficiaries: As part of looking after your dependents, also check that you have nominated beneficiaries for your super in the event that you die and ensure that you have indicated whether this nomination is “binding” or “non-binding”.
- Voluntary contributions: Consider increasing your concessional pre-tax contributions and making additional non-concessional after-tax contributions to your super but remember that there are caps or limits on how much you can contribute
If you are unsure of what your retirement super account balance target should be at this stage of your career, your super fund should provide an online retirement planner calculator. If they don’t, ASIC’s Moneysmart website provides a helpful calculator, along with other useful tips.
Once you have determined your forecast balance using the calculator, the next step is to compare it to the Association of Superannuation Funds of Australia (ASFA) Retirement Standard. The ASFA Retirement Standard benchmarks, on a quarterly basis, the annual budget needed by Australians to fund either a “comfortable” or “modest” standard of living in the post-work years. The latest quarterly figures can be found at https://www.superannuation.asn.au/resources/retirement-standard
Super in your 50s
Super in peoples’ 50s can look quite different depending on their circumstances.
For some, their super, other finances and career are all going according to plan and only minor adjustments to their super may be needed. For example, it might be time to readjust your investment settings or begin (or continue) conversations with your super fund about what life might look like from a financial perspective as you approach retirement or semi-retirement.
For those in their 50s who have faced unexpected challenges such as time out of the workforce or the end of a key personal or professional relationship, there is still time to take steps to enhance your financial future.
- Increase your contributions: Speak with your super fund and financial adviser about ways to increase your voluntary concessional and non-concessional super contributions and any changes to the law regarding super which may be of benefit but remember that there are caps or limits on how much you can contribute
- Review investment options: It is also a good time to speak with your super fund to review your investment options and ensure you have appropriate types and levels of insurance for yourself and your family.
Adviser online – super advice for all ages and stages
Irrespective of your career stage, the new free legalsuper “Adviser Online” financial advice tool will help you set your goals, map out the way forward and assist with immediate, short and long-term planning.
Built by legalsuper and expert financial advisers, it can help you:
- Budget
- Set income and superannuation savings goals
- Determine how much insurance you may need to protect your income and assets, and
- Determine the right contribution and investment strategy to help you reach your retirement goals. To access Adviser Online, legalsuper members can simply login to their Member Access account and click on the Adviser Online tile.
legalsuper is here to help
If you would like to meet with legalsuper to discuss any aspect of your super as part of a financial health check-up, our team is available for tailored and personalised 1-to-1 consultations. Contact us via mail@legalsuper.com.au or on 1800 060 312, 8am-8pm (AEST), Monday to Friday to book an appointment.
Legal Super Pty Ltd ABN 37 004 455 789 is the Trustee of legalsuper ABN 60 346 078 879, AFSL 246315. This is general information and does not take into account your personal needs. You should read the legalsuper Product Disclosure Statement and Target Market Determination available at legalsuper.com.au. Past performance is not a guide to future performance.
