Stop giving money away
The days of getting a job and settling in for the long haul are well and truly over. If you’re entering the job market today, your first job is likely the first of 17 you’ll have before you retire.
Every employer you have will likely have a different default super fund for employees. That means, unless you nominate a preferred super fund each time, you’ll end up with dribs and drabs of super in multiple accounts. Over time small amounts of super will be nibbled away.
What to do: Set up a MyGov account. This allows you to access a range of government services online, including the Australian Tax Office. Once you’ve set up your account, link it to the ATO using your tax file number and click on the super tab.
There you’ll find details of all the super funds in your name, and it’s a simple task to choose a main account and transfer all the other amounts into one.
Remember to take that one super account with you when you change jobs, carrying it with you through your career.
Why: If you have $3000 sitting in a high-fee super account, in 22 years that $3000 will become just $279.
Find an extra $13.10 a week
Salary sacrificing isn’t just for high-flyers. If you can find an extra $13.10 a week – by bringing your lunch to work and going without a coffee one day a week, for example – you can make a big impact on how much you have when you retire.
If you salary sacrifice this amount you’ll pay just 15 per cent on that contribution, meaning your super coffers will swell by $20 a week.
What to do: Talk to your boss and arrange to have the amount taken from your pay and put into your super.
Why: If you make the decision at 35, that $20 a week will become an extra $43,948 when you retire.
Check your payslip
Most employers stick to the letter of law when it comes to superannuation, but it’s worth making sure.
What to do: Check your payslip and ensure your employer is paying 9.5 per cent of your before-tax income into super at least every quarter. They are not allowed to hold on to it and pay it in one lump sum yearly. If you discover you’ve been underpaid, speak to your employer, and if that fails to resolve the issue, lodge a complaint with the Australian Taxation Office.
Why: If your complaint is upheld, your employer will have to repay any unpaid super, with interest in some cases.
Invest a windfall
If you’re lucky enough to come into some money – through an inheritance, a garage sale or a tax return, for example – consider putting some or all of it into your super.
What to do: Contact your super fund or check their website to find out how you can make contributions. It can be as simple as a BPAY payment.
Why: A 45-year-old on an income of $50,000, with $50,000 in super who begins making a $500 yearly contribution to their super, will see their retirement amount rise from $216,000 to $235,000.
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