The Super Members Council is urging young Australians to check their super more often after new research revealed more than a third either seldom check or only check once a year.
The survey of more than 1300 Australians for the Super Members Council by research house Ideally found more than one in four Australians (26%) couldn’t name their own super fund. The issue is more acute for young Aussies at 28%.
The Council has also modelled many of the financial benefits of being more engaged with your super. Its work shows paying 0.1% more in fees could make someone $14,000 worse off at retirement, while paying 1% more in fees could make someone miss out on $128,000 at retirement.
The best yardstick of how your super is performing is ‘net benefit’ - your total investment returns after all fees including advice fees are deducted.
Previous research by the council found young Australians who better understand their super are six times more likely to take action to improve their retirement savings.
A strong desire for more education about super is there too: the latest survey found 46% of young Australians would like to see super funds do more to educate them about super.
With the Super Guarantee rising to 12%, super balances are growing, which means more Australians will retire with more super in retirement.
Despite this, 33% of young Australians say super doesn’t feel like their money because retirement feels so far away.
That’s why the Council’s work includes education to build knowledge among young Australians about their super and actions they can take to strengthen their financial future.
There are some simple steps young Australians can take now to ensure they are getting the maximum benefit from super:
- Make sure you are being paid all your super: Unpaid super hurts one in four workers a year – costing 3.3 million Australians almost $6 billion a year. Check with your super fund either via an app or directly to make sure you’ve been paid correctly by your employer.
- Consolidate your super into one account: finding lost or unpaid super is now simple using the free Australian Tax Office tools and helps you to not pay multiple sets of fees on multiple accounts.
- Make sure you are with a top performing super fund: The most important measure of performance is investment returns. The ATO has a useful comparison tool for MySuper products which are all the super products that are performance tested each year.
- If you can, consider making extra contributions to super: The Council’s modelling shows the average 30-year-old who salary sacrifices $20 a week into super could have $67,000 more at retirement and get a tax saving now.
Super Members Council CEO Misha Schubert says Australia’s retirement system is the envy of the world, but more needs to be done to make young Australians more aware of how to make the most of their super.
“Too many Australians risk sleepwalking into retirement with less money than they should have because they haven't felt confident to engage with their super,” Ms Schubert said.
“Small differences in super can add up to life-changing sums over time. That’s why staying engaged with your super from when you start working until you retire is so important.”
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The opinions above are those of the author in their capacity as spokesperson for Super Members Council of Australia (SMC). SMC, the authors and all other persons involved in the preparation of this information are thereby not giving legal, financial or professional advice for individual persons or organisations.