One-third of Australians don’t know the balance of their superannuation, despite listing it as one of their most valuable financial assets.

A national industry survey conducted by Pure Profile, on behalf of Melbourne based superannuation fund VicSuper, revealed people were in the dark when it came to their super and had no idea whether they were on track for a comfortable retirement.

The super fund created an exercise which aimed at making super feel more ‘real’ by placing hundreds of thousands of dollars of cash in people’s hands.

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The wads of money represented what their super balance was now, and how much it would be by retirement if they continued contributing about 9.5 per cent.

Dr Kinsella said you can train your brain to think differently about super. Photo: Keep Left

Participants were handed the money they would accumulate if they sacrificed a small amount each week – the equivalent of a cup of coffee per day or a bottle of wine per week – and contributed that amount to their super.

CP Consulting clinical psychologist Simon Kinsella said people felt disconnected from their super because the balance statement was just “a few numbers in a piece of paper” and didn’t feel “real”.

“We find making decisions about the future intellectually, psychologically and emotionally difficult because we are hard-wired to avoid planning for it,” Dr Kinsella told The New Daily. 

“Some people can’t connect to the idea of the future because it’s simply too far away, while others don’t like to think about it because it makes them feel stressed and unprepared.”

Dr Kinsella said the exercise was about being able to slow your thinking down and engage the logical reasoning part of your brain, rather than the impulsive part.

At the end of the cash exercise he said it was found people were more inclined to become engaged with their super.

Now I know my super is real and it’s important – what next?

VicSuper CEO Michael Dundon says make a plan. Photo: VicSuper

The Keep Left survey revealed that almost half – or 46 per cent – of young Australians felt stressed about their financial future.

It found that 42.5 per cent of Gen Ys and 47.2 per cent of women worried that they won’t have enough to live on when they stopped working.

VicSuper CEO Michael Dundon told The New Daily that creating a solid plan was a good start.

“There are lots of opportunities for people in all different age groups to do something about it now,” Mr Dundon said.

“Reinvesting the equivalent of a cup of coffee each day or bottle of wine per week into super can literally mean $200,000 more in your pocket when you stop working.”

Industry Super Australia (ISA) deputy chief executive Robbie Campo said that people didn’t typically engage with their super until they were in their 50s.

She said this was why it was important that Australia maintained a compulsory superannuation system, protecting those people who weren’t making active choices,

“You really need to be thinking about it [superannuation] when you’re in your 20s – especially women who should start well and truly before they have children,” Ms Campo told The New Daily.

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Government proposes overhaul to superannuation sector

Last Tuesday, the government announced planned changes to the retirement saving system.

Scott Morrison said people needed better choices for where their super payments go. Photo: Getty

Prime Minister Malcolm Turnbull handed down the government’s response to the Murray inquiry, emphasising the need to open up competition in the superannuation sector and better regulate the industry.

Treasurer Scott Morrison said that Australians needed to be “in the driver’s seat” when it came to choosing their funds.

But several super funds managers have voiced their concerns about the proposal.

Ms Campo said seven to eight people out of 10 weren’t making active choices about their super, and that was why Industry Super Funds (ISFs) were strongly arguing for the retention of a default system arrangement.

“There is a safety net at the moment, to be a default fund you must demonstrate you are a very high performing fund, and that protects those people who aren’t making active choices,” she said.

“Industry Super Funds have been working very hard to make sure those protections remain in place, because the big banks have been lobbying very hard to have these protections removed, which, in our mind, will give them a capacity to sell super products to employers and business bankers.

“If people don’t engage [with their super] – the system needs to be looking after them.”

DISCLOSURE: The New Daily is owned by a group industry superannuation funds.