Sub category: Superannuation
2 May 2016

Do you give a damn about your second biggest asset?

What’s the second biggest asset you’re most likely to accumulate in your lifetime after your home? Hint: it’s not your car. Give up? It’s your super. Yep. That chunk of money that gets put away every fortnight sure adds up. Yet, we don’t really pause to give this a second thought. In fact, some of us don’t even see it as our money.

Why give a damn about your super?

Because it is your money. And what you do with it today determines the kind of lifestyle you will enjoy in your retirement. So here are a few helpful hints to get you on your way to making the most out of super.

1. Take control.

According to the FSC/ ING DIRECT Your Super Future Report 2015, over 68% of Australians simply stick with their employer nominated super. If you have a choice, pick a super that’ll help you achieve your goals.

2. Don’t double dip.

If you’ve worked more than one job, chances are you have more than one super account. A little bit of housekeeping here will not only save you the hassle of managing multiple accounts, you may also save on fees and insurance premiums. Consolidating is easy. You can do it with a few clicks.

3. Watch out for the ‘F’ word

We mean fees. Over time, they can burn a big hole in your retirement income. Just how big a hole? Research commissioned by ING DIRECT (January 2015) found that annual super fees can range from 0% to around 2.33%. That means on a balance of $50,000, the annual fee imposed by the super fund could range from $0 to $1,165 per annum. Due to the power of compound interest, that $1,165 per annum in fees will add up substantially over the longer term. The research showed that a 30 year old could be 60% or $192,000 better off in retirement if they switch from a super fund charging fees of 2.33% to a 0% option. (Deep breaths). If you want to know how much fees could be costing you, try this calculator.

4. Top up to be on top.

With cost of living rising all the time, one way to increase your retirement income is salary sacrifice. Not only could you be giving less to the taxman, the amount stacks up over time. Want to know how you can boost your super? Check out this handy retirement planner. Don’t forget to keep an eye on your contributions caps to avoid any unnecessary excess contributions tax.

5. Match your options to your goals and life stage

Your choice of investment strategy should be guided by the retirement lifestyle that you want, but it’s important to balance growth with risk. Generally, when you’re young, you can afford to take more risks. But as you near retirement, you may want to switch to less volatile cash options. Super can also cater to different levels of comfort and investment knowledge. If the mention of Exchange Traded Funds makes you go cross eyed, you can choose Living Super’s balanced option. On the other hand, if you fancy yourself as a Warren Buffet of sorts, you have the option of trading shares online, in real time.

 

 

Sources 
The information is current as at publication and is based on research contained in the January 2015 RiceWarner Superannuation Fees and Performance report commissioned by ING DIRECT. Super fees include investment and administration fees but not buy/sell spreads or indirect costs. The FSC ‘Your Future Super’ 2015 Report states that super is the second biggest asset that most people will accumulate during their lifetimes.

The information is current as at publication. Any advice on this website does not take into account your objectives, financial situation or needs and you should consider whether it is appropriate for you. Deposit products, savings products, credit card and home loan products are issued by ING, a business name of ING Bank (Australia) Limited ABN 24 000 893 292, AFSL and Australian Credit Licence 229823. ING Living Super (which is part of the ING Superannuation Fund ABN 13 355 603 448) is issued by Diversa Trustees Limited ABN 49 006 421 638, AFSL 235153 RSE L0000635. The insurance cover offered by ING Living Super is provided by Metlife Insurance Limited ABN 75 004 274 882, AFSL 238096. ING Home and Contents Insurance is issued by Auto & General Insurance Company Limited (AGIC) ABN 42 111 586 353 AFSL Licence No 285571 as insurer. It is distributed by Auto & General Services Pty Ltd (AGS) ABN 61 003 617 909 AFSL 241411 and by ING as an Authorised Representative AR 1247634 of AGS. All applications for credit are subject to ING's credit approval criteria, and fees and charges apply. You should consider the relevant Product Disclosure Statement, Terms and Conditions, Fees and Limits Schedule, Financial Services Guide, Key Facts Sheet and Credit Guide available at ing.com.au when deciding whether to acquire, or to continue to hold, a product. Before interacting with us via our social media platforms, please take a minute to familiarise yourself with our Social Media User Terms https://www.ing.com.au/pdf/Social_Media_User_Terms.pdf.

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