Suffering from 'super' fatigue?

I am constantly amazed by the amount of ‘airtime’ superannuation gets. For something that is, generally, quite boring – it receives an awful lot of attention.

And that attention covers topics regarding how much we have in superannuation, how much we should have, rumoured changes to the system, the investment returns achieved by various funds, and much more.

The truth is that superannuation is often not far from the attention span; yet, at the same time, Australians are notoriously disengaged with their own super.

This could be for a range of reasons – including:

• They don’t understand it and/or are not interested.
• They don’t have a sense of ownership over their super yet – particularly if the balance is still modest.
• They have become tired of hearing about the topic of super due to the large amount of media coverage it receives.
• There is constant speculation about changes that may, or may not, be made.
• Superannuation rules and regulations are complex.

From my own experience, reaching the age of 50 tends to be a ‘light bulb’ moment for superannuation.

All of a sudden – retirement is within reach. Whether it be in 10, 15, or 20 years, individuals begin to feel like they are getting much closer to that period when they can stop working. It becomes very real that our hard-earned super will be soon be providing our income for the rest of our lives.

Depending on our personal circumstances, our super may supplement retirement income from other sources (such as the age pension), or it may be our only source of income if we are intending to be a self-funded retiree.

Either way – everyone needs to get to know their super and take more than just a passing interest in it. The earlier we start – the better.

After all, no matter how modest it is, our super is ours – even if we can’t get our hands on it for years.

While, for many of us, the temptation to disconnect from the superannuation topic and surrounding discussion will be strong; we need to remember that it will play a very important role in our future. Be engaged – but not obsessed.

My advice is to take an interest in watching your super grow, and understand where your money is being invested. Check out any life insurance cover that may be included, and consider making additional contributions to your super from either your ‘before tax’ income (salary sacrifice contributions), or ‘after tax’ income
(non-concessional contributions).

If you make non-concessional contributions you may also be entitled to government contributions of up to an additional $500 towards your super – provided you meet a number of conditions.

It is never too early to start adding to you super, and the earlier you start, the greater the benefits are that you will achieve.

So – no matter how much we are inundated with news about superannuation (both positive and negative) it is crucial to understand the role it plays in order help us achieve the retirement lifestyle of our dreams.

Superannuation and tax laws will continue to change over time, but super still represents possibly the best opportunity for building sustainable retirement savings in a tax-friendly environment.

Just like a garden that needs to be cared for; your super needs a little care and nurturing in order to bloom.

The Realise Your Dream blogs are written by Peter Kelly and Mark Teale. More information about the authors can be found here