Financial Planner

As a superannuation fund member, you’ll be receiving your annual statement soon from your super fund either electronically or through the mail.

Your statement is often a good touch point on how you’re progressing with your retirement nest egg. Regardless of your current stage of life, it’s important to review your statement, as superannuation plays a vital role in supporting you in retirement.

Before you file your statement away this year, take some time to consider the following.

Prior to receiving your statement, did you know your super balance?

An important part of goal-setting is knowing how you’re tracking and the information provided on your statement can help.

Interestingly, a recent study*, found that 26% of Australians with superannuation did not know their superannuation balance whilst 42% had a rough idea and the remaining 32% knew exactly or almost exactly.

How close was your estimate?

Remember, superannuation is a form of saving. Just as you may know your ‘everyday’ and ‘saving’ bank account balances, it’s also important to take an interest in your superannuation balance.

Are you receiving the correct amount of Super Guarantee (SG) contributions from your employer?

Your superannuation balance grows from contributions and returns less tax and costs.

SG contributions are a type of concessional contribution.

SG contributions are compulsory contributions made by employers on behalf of eligible employees into their nominated superannuation account at least every three months. The current minimum SG contributions rate is 9.5% of a person’s ordinary time earnings (subject to a maximum contributions base).

It’s important to check whether your employer is contributing the correct amount into your superannuation account not only from an employee entitlement point of view, but also because these contributions will help you grow your retirement nest egg overtime.

Your statement should list SG contributions in the transaction history.

Have you supplied your Tax File Number to your super fund?

Why is this important? If your super fund doesn’t have your Tax File Number then they are required to:

  • Tax concessional contributions at a higher rate than 15%. From 1 July 2017, the higher rate is 47%.
  • Not accept non-concessional contributions, which also means that you are unable to participate in the Government Co-Contribution scheme.

Your statement should list whether you have supplied your Tax File Number.

If you have not supplied your Tax File Number, your super fund will have information on how to update your member details.

In addition, if you provide your Tax File Number, your super fund may be able to claim additional tax from the three previous financial years back from the Australian Taxation Office and re-credit it into your superannuation account.

Did you receive statements from several different super funds?

If you have changed jobs over your working life, it’s possible that along the way you may have accumulated several different superannuation accounts.

Multiple superannuation accounts normally mean multiple sets of fees and costs, as well as differing asset allocations in some instances – all of which can affect your superannuation balance overtime.

However, before you go rolling one superannuation account into another, in some instances it may make sense to retain multiple superannuation accounts – read our article, ‘Multiple super accounts and you’ for further information.

Did you discuss your statement with your spouse/partner?

Planning for retirement as a couple is a collective journey. Although, you may differ in some aspects (e.g. risk tolerances, money personalities etc.), you are a team, working towards the goal of accumulating wealth for retirement. And for most households, superannuation is the second largest asset held^.

Talking about your personal finances can be a truly beneficial discussion about where you are, where you would like to be and how you are going to get there. And remember, your financial adviser is here to help along the way.

Moving forward

Reviewing your statement is important.

Superannuation is a tax effective investment vehicle that will help you accumulate wealth during your working life to support your lifestyle in retirement.

Going through the five questions above and other important information in your statement (such as your investment mix, nominated beneficiaries, personal insurances and fees) is a good discipline and can help you better understand where you are at with your superannuation.

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