Money Your Super Top tips for building super through the ages
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Top tips for building super through the ages

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From our first paycheck we start accumulating superannuation, but it’s generally not until much later in life that building superannuation becomes a real concern.

New data from REST Industry Super shows that while most people have a long list of items for life after work, at least half are concerned that a lack of money will hold them back.

“Most people will spend 40 to 50 years working full-time, raising a family and paying off the mortgage, so retirement really is the time to enjoy the fruits of your labour,” REST Industry Super CEO, Damian Hill, says. 

“Of those with bucket lists, 43 per cent plan to take a road-trip and one in seven want to swim with dolphins, showing Australians want an active and exciting retirement.”

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Mr Hill says one in five don’t think they’ll tick off any items on their bucket list.

“Too often people underestimate the cost of retirement, and the gap between what people think they need to retire on and what they require in reality is often significant,” he says.

coffee woman servingSo how can you take control of your superannuation investments throughout life and fulfil your bucket list of dreams?

Teens: pick one superannuation account

There’s often not a lot of consistency to working life as a teen, and with job hopping can come a multitude of superannuation accounts.

Moran Howlett Financial Planning’s Paul Moran advises the best way to reduce fees and maximise fund accumulation is to pick one account on your first day of work and stick with it.

“Every employer offers a choice of funds and so once you have settled on a fund that you like, make sure that you give these details to every new employer,” Mr Moran says.

Read more: Kick-start your super

Late 20s/30s: maximise your investment

A promotion or payrise might be more at the forefront of your mind in your 20s and 30s, but now is the time to invest and take risks.

REST’s Mr Hill recommends using career moves to contribute a little extra towards super: “If you do it when your pay check is already changing, you may not notice the difference in your take home pay.”

Likewise, Mr Moran says to maximise your nest egg, look at what type of portfolio your accumulated superannuation is being invested in – you might aim for higher growth and higher risk.

tennis man playingThis is particularly important for people who are planning to take a break from the workforce for family or other reasons.

Read more: Super-charge your super in 30s

In your 40s: are you on the right track?

REST’s Mr Hill says now is the time to get serious about super.

“It’s important to know where your money is going,” he says, “and also find out if you’re on the right track to have enough money for retirement.”

As a guide, the March 2014 Association of Superannuation Funds of Australia Retirement Standard showed that, in general, a couple looking to achieve a comfortable retirement needed to spend $57,817 a year, while those seeking a ‘modest’ retirement lifestyle needed to spend $33,509 a year.

Check the MoneySmart superannuation calculator to see if you are on track.

Read more: Turbo-boost your super in your 40s

In your 50s/60s: call an expert

The critical step at this point is to make sure risk levels in your superannuation portfolio are correct and steps are being taken to develop a portfolio that provides an income in your retirement. Superannuation funds offer free financial advice, so take advantage of it.

ShutterStockAlso make sure all your debt is paid down and maximise your super contributions.

Read more: Rev up your super in your 50s

Retirement age (from 65): set a plan and stick to it

Reaching retirement is an exciting time, full of potential, but it’s important to acknowledge that it is not like winning lotto – funds need to be managed accordingly, Mr Moran says.

“Many retirees who have not planned well tend to overspend by about 40 per cent per year for the first five years of retirement and this has a big impact on their ability to manage in the future,” he says.

If you are unsure how to effectively plan your savings, or you get into trouble, don’t hesitate to seek financial advice.

Read more: How much do you need to retire at 65?

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