Author: Kristy Coulin Early retirement is a common dream of many Australians. No one wants…
How to make your super a worthwhile investment
For many Australians, by the time we retire, our superannuation is one of our biggest assets.
So, it only makes sense that we take care of it and make sound investment decisions with our superannuation.
The good news is there are plenty of ways to grow your super with the help of professional financial advice.
While most of us understand the basics of super:
- that it is a way of saving for retirement;
- that we get paid a superannuation guarantee contribution from our employer;
- the money goes into our super fund account;
- we can access our super balance when we retire;
many people don’t understand that you can do more with your super than just let it sit there.
Although it’s one thing to know how much super you have, it’s another thing entirely to know how to get your super balance to where you want it to be.
We often refer to our superannuation as simply “savings for retirement,” the truth is that it is not just savings – it is an investment.
Super funds don’t just keep your money in a savings account, they invest it on your behalf. But investing requires knowledge and maintenance for the funds to perform the best they can.
Realistically, your super should be a significant part of your investment strategy.
So, how can you make your super a worthwhile investment?
Here are 5 ways to potentially increase your super for a better retirement
1. Consider taking more risk
When it comes to investing, there is always a level of risk associated with that investment.
When it comes to an industry super fund, your level of risk is already decided for you on behalf of your super fund.
However, most super funds will allow you to choose your own investment option and the choice you make could make a dramatic difference to your balance.
Generally, with investments, higher risk = higher returns.
According to ASIC (Australian Securities Investments Commission), there are four main super investment options:
Less than half of Australian super investors are willing to take on even moderate levels of investment risk, significantly impairing their ability to reach their long-term lifestyle goals.
How is your super invested?
2. Swap funds or consider an SMSF
One activity to consider is what we like to call a ‘super audit’. This involves looking at your current super fund and the options and flexibility it provides you now and for the future.
If your current fund does not suit your needs, you may like to shop around for a better deal or for some clients, they may find specific benefits in starting a Self-managed Super Fund (SMSF).
3. Start early
It is never too soon to start looking after your super, so the earlier you start making smart, informed financial decisions, the more opportunities you will have in retirement.
By starting early, your super becomes a long–term investment meaning you have more flexibility and opportunities to grow your money.
Everyone deserves a perfect retirement no matter what that looks like for you.
The earlier you start investing in your super and planning for retirement, the more peace of mind you will have knowing you will be secure and happy in retirement.
4. Make contributions and save on tax
Voluntary super contributions are another way to grow your super.
You can make the following super contributions and potentially reap the financial benefits1:
- Salary sacrificing: pre-tax super contributions could save you around 20% in tax
- After-tax super contributions (see the ATO’s non-concessional contributions for more)
- Government co-contributions: can save you up to $500 a year
- Spouse contributions: up to $540
- The downsizer contribution: up to $600,000 per couple
There are limits on how much you can contribute to your super each year. Use Moneysmart’s Super Contribution Optimiser to see how you can grow your super.
5. Seek financial advice
Quite possibly the most valuable way to invest in your super is to seek professional financial advice.
Our financial advisers in Newcastle can help you understand how best to invest in your super.
At NFPG, our financial planners understand that a fulfilling retirement requires financial comfort. We can help you make the right financial decisions with your super for comfort, peace of mind, and happiness.
Book an appointment with one of our financial advisers today.
Your first meeting is free, so you have nothing to lose and everything to gain. Book now.
1. RI Advice Superannuation Insight Factsheet, https://retireinvest.ytml.com.au/_doc/RI_Superannuation_S3/Snapsheet%3A%20Supersize%20your%20Super.pdf
The views expressed in this publication are solely those of the author; they are not reflective or indicative of RI Advice Group’s position and are not to be attributed to RI Advice Group. They cannot be reproduced in any form without the express written consent of the author. This information (including taxation) is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice. Newcastle Financial Planning Group, Central Coast Financial Planning Group and Sydney Wealth Advisers are subsidiaries of Coastal Advice Group which is a Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.