Financial Planner

If you are a member of any superannuation fund (and you should be if you are employed), you will soon receive your annual statement either by regular mail or in an email.

This statement will provide you with information regarding how your retirement nest egg is growing. Regardless of which stage of your life you may be in, it is essential that you review your statement thoroughly because superannuation plays a crucial role when it comes to supporting you after retirement.

Before you just file your statement though, it is important to take the following aspects into consideration:

Did you know what your Super Balance was before getting your Statement? 

A crucial part of goal setting is knowing how your fund is performing and the information contained on your annual statement will be a big help with this.

A recently undertaken study noted that approximately 26% of Australians who have superannuation did not know its balance, while 42% had a basic idea and the rest knew almost precisely what the balance was in their funds.

It is important to keep in mind that superannuation is an excellent form of saving. Although you may know exactly how much you have in your regular bank account and savings account, it is also essential that you take an interest in what is happening with your super fund balance.

Are you Obtaining the Right Amount of Super Guarantee (SG) Contributions from your Employer?

The balance in your super fund grows as a result of contributions and returns minus costs and taxes. In fact, your SG contributions are known as a form of concessional contribution.

Employers are compelled to make SG contributions on behalf of qualifying employees into the chosen super account at least once every three months. At present, the minimum rate for SG contributions is 9.5% of an employee’s regular income – subject to a maximum contributions base.

It is crucial that you check to see that your employer is in fact contributing the correct amount into your super account, not only because you are entitled to these funds, but also because these funds will be of great help in growing your nest egg for retirement over time. The transaction history on your statement should list all SG contributions that have been made.

Has your Super Fund been provided with your Tax File Number?

This is extremely important. If your tax File Number has not been recorded by your super fund, they will then be required to:

  • Not accept any form of non-concessional contributions. This means that you will not be able to take part in the Government’s Co-Contribution scheme
  • Tax your concessional contributions at a rate that is higher than 15%. As of July 1, 2017, the higher rate is a staggering 47%

If you have supplied your Tax File Number to your super fund, it will be reflected on your statement. However, if you have not done this yet, you can obtain information from your super fund that will tell you how to go about doing this.

If you provide your super fund with your Tax File Number, they will be able to claim additional tax from the three preceding financial years back from the Australian Taxation Office and re-credit this amount into your super fund.

Have you Obtained Statements from More than One Super Fund?

If you have changed employers during your career, it is possible for you to have accumulated numerous different super accounts.

Having several super accounts will usually result in you paying many sets of costs and fees, along with varying asset allocations in some cases – all of which will have an effect on your overall super balance as time goes on. However, before you rush off and roll all of your super accounts into a single one, it can sometimes be better to keep multiple super accounts. You would need to speak with an experienced financial advisor to confirm this though.

Have you Discussed your Super Statement with your Spouse or Partner?

Having a steady retirement plan in place as a couple is crucial. While the two of you may have different views with regards to money personalities and risk tolerances, it is important to remember that you are a team that is working towards a common goal of being able to build enough wealth to see you through your retirement years. Also keep in mind that a superannuation fund is the second largest fund held in most households.

Sitting down with your partner and discussing your finances will be highly beneficial because it will enable you to see where you are, where you’d like to be in future and how you intend getting there. It is important to remember that your financial advisor is also available to provide you with guidance and assistance in this regard.

In Conclusion

Carefully reviewing your superannuation statement is essential. Your super is a highly tax effective means of investment that will help you build a decent amount of wealth throughout your working life to ensure that you are sufficiently supported during your golden years.

Answering the above mentioned questions honestly and reviewing all of the other information on your statement such as the investment mix, personal insurance, fees, chosen beneficiaries and other points is strongly recommended because it will provide you with a better understanding of how your super fund works and how it will benefit you during retirement.

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