Understand Your Superannuation Statement: A Critical Step for Your Retirement
As Australians eagerly await their annual superannuation statements, it’s essential to recognize the significance of these documents. They provide vital insights into your retirement savings that can dramatically impact your financial future.
What to Expect in Your Superannuation Statement
This yearly document is not just another piece of junk mail; it’s packed with key information about your super fund. Here’s what you’ll typically find:
- Investment Performance: Details on how your investment has fared over the past financial year.
- Fees Paid: A breakdown of any charges taken from your account.
- Investment Strategy: Information on where your money is being allocated.
- Beneficiaries: The individuals named to inherit your super in the event of your passing.
- Insurance Coverage: What protections you have in place as a member of the fund.
Why You Shouldn’t Overlook This Document
Superannuation expert Pascale Helyar-Moray emphasizes the importance of regularly reviewing your fund rather than treating it as a “set-and-forget” asset. She notes that, “Put simply, performance should be high, and fees should be low.”
The Importance of Annual Review
According to research from Canstar, 20% of Australians check their super fund only once every few years or not at all. Yet, monitoring your superannuation performance each year can lead to significant financial benefits. For instance, a 30-year-old who switches from a fund yielding a 7% return to one with a 7.7% return could amass an extra $122,587 by retirement age.
Financial Needs for a Comfortable Retirement
The Association of Superannuation Funds of Australia outlines that a single individual needs $595,000 for a comfortable retirement, while couples should target a combined balance of $690,000. Hence, being in a top-performing super fund versus an average one can dramatically affect your retirement savings.
Taking Action: What to Do If Your Fund is Underperforming
If you notice that your fund isn’t yielding strong returns, it may be time to switch to a provider that can offer better performance. “While past performance doesn’t guarantee future results, it can inform your decision-making,” advises Sally Tindall, Canstar’s director of data and insights.
Utilizing Available Tools
To make informed decisions, you can take advantage of resources offered by the Australian Taxation Office (ATO). Their free service allows you to compare your super fund’s performance and fees with others by simply inputting your age and account balance.
Be Aware of Fee Structures
A recent Canstar analysis found a significant disparity in super fund fees, with annual charges ranging from $671 to $1,121. It’s crucial to ensure that your fund’s performance justifies its fees, especially since the minimum mandatory super contribution from employers increased to 12% as of July 1.
Additional Considerations for Your Super Fund
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Investment Strategy: Regularly assess where your money is allocated based on your age and comfort with risk. Just because you’re nearing retirement age doesn’t mean you should automatically shift strategies.
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Consolidate Accounts: If you have multiple super accounts from past jobs, consolidating them can save you money on fees.
Upcoming Statement Release Dates
It’s crucial to know when you will receive your superannuation statement to ensure timely review. According to Canstar, here are the release dates for some top super funds:
- AustralianSuper: Late September to November
- Australian Retirement Trust: September to December
- Aware Super: From September 11
- Unisuper: September
- HOSTPLUS: September
- Colonial First State: Late July to September
- CBUS: September to October
- REST: September to October
- HESTA: November to December
- MLC: Available online and mailed by September 30
Final Thoughts
Your superannuation statement is not merely a document but a crucial tool for ensuring your financial future. Regular reviews, understanding your fund’s performance, and making informed decisions can substantially affect your retirement readiness. Don’t let your super run unchecked; take charge of your financial destiny today!
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