How much do you have saved for your future? Not sure? Don’t worry, lots of people don’t know either. The money saved in our Super accounts seems to carry a different value for a lot of us.
We might not regularly see the amount or think about it… and why should we? We won’t need it for another 30, 40, 50 years!
But that’s why kick-starting your Super in your 20s and 30s is so important. You’ve got plenty of time to make small changes now that will make a huge difference later. Consider this – what would you do right now if a $50 note fell out of your pocket in the car? You’d turn the car inside out trying to find it, right? Well, the amount you have saved in Super comprises all the $50 notes you’re going to have from the time you stop earning. And you might need a whole lot!
We’ve pulled together a few quick tips for giving your Super a kick-start now, that will have a big impact later.
1. Value your Super – one of the easiest ways to give your Super a kick-start is to think about your Super money in the same way you think about the cash you bought your coffee with this morning. Just because you won’t be spending it for another 30 or 40 years, doesn’t mean you shouldn’t care about it. Having that number in front of you and watching it grow is a great motivator and will get you thinking about it more often.
2. Salary sacrifice – you’ve probably heard that term before, but do you know how fantastic salary sacrificing really is? Salary sacrificing is an arrangement between you and your employer which allows you to make additional contributions to your Super (on top of the compulsory contribution your employer makes). But the best part is that it comes out of your pre-tax salary! So not only does it reduce your taxable income (so you pay less tax), but it means you see your Super balance growing much faster. While you’re young and have more disposable income, you’re unlikely to notice any money is missing. Consider putting away even just $50 per week. That small amount, sacrificed for 10 years, may give you an extra $26,000 in your Super, not to mention all that extra interest! Be mindful, there are contributions caps you cannot exceed. Speak to a financial adviser to find out more.
3. Consolidate your Super into one account – we’re very fortunate in Australia. As you’ll know, from when we start working, our employers put away at least 9.5% of our salary into a Super account for when we retire. But when you were 15, you probably didn’t care about what Super account was set up for you – and that was probably the case for each part time and summer job you’ve had since then.
That means you could have a few Super accounts lying around, each with a little bit of savings being eaten away over time by fees. The Australian Tax Office offer a great service for finding your lost super and all those accounts, and then rolling them up into an account of your choice. It’s free, quick and easy – do it today!
4. Care about your account – when choosing a Super account, check out the features provided. Do you have flexibility with investment options? What fees and administration costs apply? Low fees will keep your Super from being eroded by exorbitant administration costs over the years, while a flexible fund will give you the chance to amend the investment mix as your circumstances change.
As you can see, it doesn’t take much to get more involved in your Super. Even though it seems like it’ll be a long time until you need it, making small changes now can have a big impact in the long run. If you’d like to start thinking about your future, please call us on 1300 747 747 today.
The information in this article is general and does not constitute as advice. It has been produced without taking into consideration your personal financial circumstances, objectives or needs. Before deciding to acquire any product, you should conduct your own investigation and analysis of any benefits or costs and seek your own independent legal and financial advice. You should also read our Financial Services Guide before applying for our financial products and services. Qudos Mutual Limited trading as Qudos Bank ABN 53 087 650 557, AFSL/Australian Credit Licence 238 305.
Published March 2017