Super-charge your super in 30s

Turbo-boost your super in your 40s

Rev-up your super in your 50s

A raise is within reach, perhaps next a promotion and then, well, you’ll probably take over the world. So what about beyond that?  It’s never too early to think about the future – and while in your 20s you’re likely to be focussed on reaching career highs, here’s five tips to help translate that success into financial comfort in your later years.

Pay Down Debt

Before you can think of superannuation or retirement, it’s important to make sure your finances are in order in the present.

Greg Harper, Cbus advice services general manager, says to pay off credit card debt, pay down your mortgage and then look ahead.

“You might get wonderful returns in the future, but there is no point if you are still paying 20 per cent interest on a credit card debt now,” Harper says.

Take Advantage of the Government’s Co-Contribution Scheme

As a new worker retirement might seem especially far away, but it is the best time to take advantage of the Government’s co-contribution scheme. If you put a dollar in, the Government will give you 50 cents – working on a sliding scale up to an annual income of $48,516. It’s free money for the future you.

Salary Sacrifice

If you’re above the co-contribution limit, it’s still worth adding a little extra, says HESTA CEO Anne-Marie Corboy.

“Put a little away now to benefit later in life by making before-tax contributions (known as salary sacrifice) to your super.

“You may reduce the tax you pay on your income and super contributions may be taxed at a lower rate than your income.”

Ms Corboy also encourages investing tax returns or bonuses into super.

“By topping up early, you can make the most of compound interest (interest earned on interest). For example, $20 per week can make a big difference when you retire.”

Consolidate Your Super

The average Australian has up to five super accounts. That means five sets of fees, charges and paperwork instead of money that could be going towards your retirement. There are also billions of dollars of lost super. It’s now easy (and free) to consolidate your super, and find your lost accounts, online using the Australian Tax Office’s SuperSeeker website.

Compare Funds

Choosing a super account can be overwhelming, so if you are choosing your first account or looking to consolidate, research is key. A good place to start is at any of these super comparison websites. They’ll show you the past performance of the super funds – the Government advice is to look at results over a five-year period rather than just at last year.

HESTA’s Ms Corboy says to make an active choice.

“Invest your super according to your retirement goals and the level of risk you’re comfortable with. And remember, these may change over time.”

Keep Track of Your Fees

If you lost $20 down the back of your couch, you’d probably pull apart the couch to find it again, says Cbus’s Mr Harper. He says the same logic needs to be applied to fees for services, including super as well as banks and phone contracts.

“If you can save $100-200 by not paying your credit card interest or reducing your mortgage interest rates, or saving on bank fees, or moving to a super fund that provides good quality, low cost services, then instead of being apathetic, change.”

HESTA’s Ms Corboy warns that while low fees are important “choosing a fund solely because they advertise low — or even no — fees, may mean accepting lower investment returns”, which can have a huge impact on retirement savings.

If You Stop Work, Don’t Stop Making Contributions to Your Super

Women, in particular, are impacted by career breaks to care for family as well as a greater tendency to work part-time, affecting how much super they contribute. Ms Corboy says it is important to continue to contribute.

“Women …  need to take a proactive approach to boosting their super,” Corboy says.

“Women tend to live longer than men, on average — so their need to save for a longer retirement is higher.”