It's vital to know your Super.

It can be easy to set and forget (or even lost track of) our Super. In fact, as at 30 June 2018, approximately 40% of Australian had more than one Super account. On the flip side, about one in four Aussies do not have a Super account at all. For many reasons, it is vital for you not only know your Super accounts, it's critical for you to understand and keep on top of its performance.

So why is knowing your Super so important?

Retirement can last a long time

Once you retire, your main source of income will cease, i.e. as long as you are not working, you are no longer earning traditional income through employment. Having the means to fund your life through retirement is an important concept that is often left too late.

"Eight out of ten of our clients grossly underestimate how much money they will need for their retirement" said Ashleigh Ton, Director and Principle Financial Planner at SAT Financial Group. "Of the remaining clients, only one in five have a clear vision as to how they will save the money required." Add to this the fact that people are generally living longer, it is likely that many Australians will not have enough money to fund their retirement and will spend their final years with a degree of struggle.

Age Pension may not be enough

While the Australian Government offers an Age Pension to eligible individuals, the amount you receive may not be enough to give you the lifestyle or fulfil the financial obligations you currently have. There is no question that we should all have the opportunity to enjoy our retirement. You may, for instance, have travel plans for when you retire, or to take up new hobbies or take up some new memberships since you're no longer working.

If this is the case, having the option to supplement any Age Pension by drawing on your Super can be greatly beneficial to ensuring a steady and adequate income stream.

It's a great way to save over a long term

The tax concessions provided to Super by the Australian Government has helped make Super one of the best long-term investment options. Your Super is essentially money put aside for your retirement, i.e. your savings. As Super is a long term investment, every dollar you save could make a significant difference.

A key feature of Super is that you typically cannot access your money until you retire. Coupled with the findings from Canstar that the average return on the top 10 performing Super Funds is 23.83% while a savings account is averaging 4% returns, Super is an extremely effective investment for your retirement.

Insurance inside Super accounts

Super funds generally offer insurance cover within the fund. Insurance cover can help provide financial security to the member or their family in the event of the member's disability or death. There are generally three types of insurance available through Super funds:

• Life Insurance
• Total and permanent disablement (TPD)
• Income protection

Insurance cover through a Super fund is often arranged under a group insurance policy which can be less expensive than insurance cover offered directly to individuals outside of Super. Insurance premiums are funded from your super balance rather than your after-tax income as they would be outside super. This means you don't need to find the money to pay your premiums but you'll need to ensure your super balance is sufficient to cover your premium payments.

For any questions about your Super, contact us and one of our teams will be glad to help.

References:
Tammika Seeto (2021, Oct 8) "Top Performing Super Funds on Canstar's Database"