Paying off a mortgage, schooling costs, or saving for a family holiday – there are easily a thousand and one things you're probably prioritising over your superannuation. However, a thriving super fund is actually one of the most important investments you'll make in your life.
Unfortunately when it comes to super, women draw the short straw. Stats from the Australian Bureau of Statistics show that, currently, women are retiring with almost 40 per cent less super than men. That's a pretty terrifying thought considering women on average live five years longer than men!
Whether you're mid-way through your career or on the road to retirement, 2019 is the year to start thinking about getting your super in check. If you're struggling with solutions, don't worry. We asked Sarah Saunders, Head of Consumer Advocacy at Industry Super Australia to chat about how women can make the most of their super heading into the new year.
1. Re-evaluate the amount you're putting into your super account
It's easy to turn a blind eye to your super, particularly when compulsory contributions come out of your salary. However, these contributions see many women falling short of their grand retirement goals, particularly part-time workers. The comforting thing to know is, this unfortunate circumstance is an easy turn around.
Sit down, calculate your finances and decipher whether you can spare a little money. If so, inform your super fund and employer and "make the most of concessional contributions but be careful not to exceed the annual $25,000 cap," Saunders informs. These contributions not only equal big benefits come tax time but will maximise the growth of your retirement wealth.
2. Streamline your super and find the right fund for you
If you're someone that's coordinating multiple super accounts, you'll know that it's tricky (and expensive) keeping up with what money you have stashed where. In fact, six million Aussies have lost super accounts, amounting in over $14 billion of lost super money and some of that might be yours! 2019 could be the year to streamline your super, save on fees and get your retirement fund back on track.
But before you consolidate your money, it's super important to find a fund that benefits your specific needs, whether that be your job or stage of life. "Industry SuperFunds have consistently higher earnings in each asset class, lower fees and no commissions," Saunders says. So start that super fund search by seeking out the Industry SuperFund symbol and let your research stem from there.
3. Keep on-top of those policy changes
Policies around superannuation are changing faster than a speeding bullet, so the turn of the new year proves the perfect time to have a little investigation. The 2018 budget has seen a range of changes, in particular tweaks to self-managed super funds.
These changes – including others made over the last couple of years – are bound to affect all income earners. "The concessional contributions cap has fallen to $25,000 a year regardless of age – for the over-50s it used to be $35,000. The after-tax contributions limit has gone from $180,000 a year to $100,000; and after-tax contributions for balances over $1.6 million are no longer allowed," says Saunders.
4. Pre-empt your super short fall times
The average Australian woman is retiring with about forty per cent less super than men, but why? Maternity leave, caring for kids and lower salaries mean that women, unfortunately, are sometimes unable to stash away more cash for their retirement. If you're feeling a little sceptical about the figures in your super account, 2019 calls as the year to think about pre-planning for those times where you might be falling short on your super contributions.
If you are set to take maternity leave in the new year, chat to your employer about making super contributions during your paid leave. If this prospect isn't an option, you might want to think about making tax offset contributions from your savings or even chatting to your partner about spouse contributions. The more you plan, the greater your retirement fund, after all.
This article was first published by Bauer on 27 November 2018. The information referred to may change from the date of publication and care should be taken when relying on such information.
*The above material, whilst correct at the time of publication may include references or statements which are no longer current.