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Superannuation – Too young to care?

Your employer is paying 9% of your salary into super. Although you can’t use these funds until you retire, it is still your super. Taking an interest in your super now can have a big impact on your future lifestyle choices.

There are some simple things you can do that will significantly improve your long term savings outcome.

Be informed

How much super do you have now? How is it invested? Is your fund performing well? Get to know as much about super as you can. Check out your fund’s website and read and track your investment. After all it is your money. If you’re not happy with the performance of your employer’s default fund you can choose a different fund that meets your needs better. Also, explore the insurance options available in super particularly as your responsibilities increase. Group insurance in super is considerably cheaper than insurance outside super and you don’t have to come up with the cash yourself.

Consolidate your superannuation accounts

Have you moved jobs and not moved your super? It makes sense to have all of your super savings together. You’ll reduce the amount of fees you’re paying, only receive one set of paperwork and only have to keep track of the one fund. If you have multiple super funds consider consolidating by rolling into your current fund. If you’ve moved around, changed jobs or think you’ve lost track of some super refer to SuperSeeker on the ATO website. You might get a pleasant surprise.

Consider your investment strategy

Most funds have a default option to suit the majority of fund members. However, as super is a long term investment, when you’re young you can afford to look at more long term growth oriented investments such as shares and property, instead of sticking with more conservative options. The returns from growth options, while fluctuating more, tend to outperform the more conservative options in the longer term.

Take advantage of the Government Co-contribution Scheme

If your adjusted taxable income is under $61,920 consider making a personal contribution from your after tax income so that you can receive the Government’s co-contribution which can be up to $1,000. In effect this stretches your contribution. You can use the super co-contribution calculator to calculate the extra contributions you’ll receive.

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