Making the most of your Super

Financial OpportunityOver the next few years, superannuation benefits will gradually increase to 12 per cent. To ensure there is a nice nest egg available for when you retire, there are a number of preparations you need to make now.

Working out how much money you’ll need to access in retirement is ultimately a personal decision. But once you decide how much you need, you can put a strategy in place to achieve your goal.

The first way to ensure you are making the most of your super is to track down any old accounts. It may surprise you that one in two Australians will lose track of their super during the course of their working life. Statistics released by the federal government indicate that approximately 3.4 million superannuation accounts, with a total estimated value of over $16 billion, have been ‘lost’ by fund members.

Losing some of your super can have a drastic impact on your financial freedom and lifestyle during those golden years of retirement. Thankfully, there are a few cost-effective ways to help you locate and retrieve any lost super funds that are rightfully yours.

The Australian Taxation Office (ATO) has established a simple and cost-effective way to locate your super by using an online program. The program, known as SuperSeeker, is free to use and available online 24 hours a day, seven days a week.

To access the service, visit the ATO website at www.ato.gov.au and click on the ‘Super Funds’ tab near the top of the page.

You can use SuperSeeker to check all super accounts to which you have made a contribution and to track down all lost super accounts in your name that have been reported to the ATO – as well as any super money the ATO currently holds for you.

Once you have tracked down any old super accounts, it’s time to think about how you are going to make up any gap between the actual balance of your super account and the amount you hope to have at the time of retirement.

Have you considered voluntary contributions?

Even small contributions into your super can make a big difference. For example, adding a voluntary contribution of just $20 a fortnight over a period of 30 years could mean an extra $30,000 by the time you retire.

While giving your superannuation accounts a health check may not be the most fun way to spend an hour, it will pay dividends in the future and will ensure you can live the retirement you want, without financial stress.

SMSF considerations

Self-managed super funds (SMSFs) are a hot topic at the moment, but are they really an option for everybody?

It is important to consider the following factors before setting up your SMSF.

As a trustee, you have total control over investment strategies and your money. You also have greater choice in regards to the investment opportunities and the flexibility surrounding your fund.

By pooling your super with family members or business partners in an SMSF you may be able to save money to invest more quickly, potentially reaching your investment goals sooner.

Although SMSFs allow for greater control of your money, there are extra costs associated with this kind of super fund. As a trustee, you will have added responsibilities and legal obligations that you don’t need to worry about when someone else is managing your super fund.

You will need to weigh up the costs of having your fund professionally audited each year, plus ongoing administration costs. You should consider whether the benefits outweigh these additional costs.

Most financial experts suggest that to make the most of your SMSF, you should have at least $200,000 in savings and some financial experience.

It is important to consult an SMSF specialist before making any decisions.