Posted by Stephen Buhlman on 16-February-2012, 03:02 PM
Our intouch Wealth Management division has found this
great article to make sure that your superannuation is working for you. Below
is a quote from the Director of intouch Wealth, Stephen Buhlman:
your employer pays 9% p.a. (proposed to increase to 12% pa) of our gross salary
as the Compulsory Super Guarantee payment. However, many clients that we meet
with do not seem to be that interested in an asset that will essentially pay us
an income in retirement (your house certainly won’t). They see this forced
saving as a burden, and as such, just set their portfolios off to the side,
never reviewing it to ensure that it will meet their retirement
aspirations. Sadly, we feel that most people will struggle through their
retirement years because a) they have not reviewed where their wealth is
invested and/or how it is being managed (largely due to apathy) and b) because
even at 12% contribution, this probably won’t be enough for someone already
half way through their working life to fund an adequate retirement income –
this will result in people staying in the workforce longer, or severely cutting
back on the way in which they live.
You should’ve received your super fund’s half-yearly statement by now. If you don’t usually pay much attention to super mail, here are five reasons to give your latest statement a close read.
1. Funds make mistakes
Super fund statements are just like bank statements
and sometimes errors are made. For example, it’s worth checking that the amount
of super guarantee shown on your payslip is the same as the amount listed on
your super statement. A discrepancy may mean your employer hasn’t paid the
right amount of SG or that payments have gone astray. It’s also a good chance
to make sure information about fees and investment returns also add up. If you think you find an error, contact your fund
or adviser and discuss it with them.
2. Are you in the right investment option?
Your circumstances can change and the investment
option you chose last year or even five years ago may not be the best place to
have your super now. Taking a few minutes to read your statements twice a year
can give you an indication of how the investment option you’ve chosen is
tracking, how much risk is involved and whether or not it’s still the right
choice for your life stage.
If you’re younger, for example, high-growth,
high-risk investments may be the best bet because in spite of short-term losses
they generally make superior returns over the long-term. As you inch closer to
retirement and have less time to make up for periods of short-term loss, you
may want to move into more defensive investment options such as fixed interest and cash. You can discuss these choices
with your fund and/or a financial adviser.
3. Do you have the right
Are your insurance needs taken care of within your
super fund? How long is it since you checked that you have the right level of
cover and the right types of cover for your needs. Most funds now offer death,
total and permanent disability and income protection insurance. The cover
offered is usually cheaper than you can obtain outside of super but your
premiums can’t be claimed as a personal tax deduction. Have a look at how much
you’re paying and whether you have adequate cover.
4. Are your beneficiaries up to date?
Check your nominated beneficiaries are still
current. This is particularly important in the event of divorce or separation.
5. Does your fund deserve your business?
The most important reason for opening all information received from your super fund is to keep your eye on whether it is working in your best interests. Does it provide persistent and healthy returns? Are its fees reasonable? Are you paying for financial advice in the form of trail commissions and if so, are you getting any service for that fee? These are all questions you can discuss with your fund. It may seem like an eternity until you retire and access your super but it’s your money so why not make sure your fund is offering the best possible value.
Source: Jackie Pearson, Your Money Magazine, http://www.yourmoneymag.com.au/article/five-reasons-to-read-your-latest-super-statement-121968.aspx