3 ways to grow your super balance

Australia’s aging population means that we are living longer than ever before. It also means that we need more money than ever before to support us throughout our retirement. However, research from finder.com.au, which surveyed 2,274 people, found that only 33% of Aussies know their exact super balance, so it seems the majority of us are in the dark about how much money we have to last us the 20-40 years of our retirement.

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With the ever-increasing costs of living, it’s important to start building up the funds in your superannuation account as early as possible, to ensure that you can enjoy financial stability in your golden years.

Here are some things you can do now to maximise the balance of your super fund in the future.

Compare and select the right super fund for you

It’s very important to compare super funds and select the one that best suits your needs and your investment strategy. Being with a fund that has strong long-term performance, minimal fees and benefits such as life and income protection insurance can significantly increase your super balance.

You need to determine which type of super fund is most appropriate for you. The two main types are retail super funds and industry super funds. Retail super funds are run by banks or investment companies and offer a range of investment options and access to financial advice. Industry super funds may be limited to employees in certain industries and have a smaller number of investment options.

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Salary sacrifice part of your income to your super fund

This involves placing some of your pre-tax income into your super fund, rather than keeping it to spend now. Before you decide to do this, you should first look at your income and your expenses to determine whether you can actually afford to put some of your income away into your super account.

You can then make an arrangement with your employer for them to make a voluntary contribution to your super account in addition to their compulsory 9.5% contribution. Salary sacrificing can be beneficial if you are earning over $37,000 a year, as it will come from your pre-tax salary and will be taxed at a lower rate than the rest of your income.

Consolidate your accounts

If you have failed to keep track of your superannuation over the years, it’s likely that you’ll have multiple super accounts that were created each time you started a new job. Having multiple accounts means that you are paying multiple fees, which decreases the total amount of superannuation that you will retain for your retirement.

When consolidating your accounts into one, you may be charged high exit and termination fees. The costs of these vary depending on your fund and may be incurred when you make a partial withdrawal or when you close your account. This amount will usually be a percentage of the of the total amount in your fund. It’s important to check that your new fund offers the same benefits and level of insurance as your old fund. You should also notify your employer of the consolidation so that they can identify your super fund and ensure that they make their payments to the correct account.

Superannuation has a bad reputation for being confusing and it’s something that most people don’t want to worry about till the future. In reality, the earlier you sort out your super, the better. The money that you put into your super fund now will ensure that your many many years of retirement are more financially comfortable, so that you can live your twilight years to the fullest.