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Getting the most out of your superannuation

4 minute read – NDIS Carer Series – Superannuation

While many of us love our jobs, we still daydream about when we can hang up our boots, retire and hit the grey nomad track in our fully fit-out mobile homes.

In order for that dream to become a reality, we need to make sure we are not only putting away enough savings while we work now, but that our employer and voluntary super contributions are working as hard as they can for us.

In a study of more than 2,000 frontline disability workers, the University of NSW found only one in five expects to have enough superannuation when they retire.

While this may seem alarming, Qsuper reports Australians currently aged 65 to 74 have around $446,000 (men) and $378,000 (women) in super, on average.

The Association of Superannuation Funds of Australia’s Retirement Standard reports Australian’s need around $545,000 for an individual and $640,000 in super for a couple to retire comfortably.

With these figures in mind, Australia’s disability workers certainly aren’t on their own when it comes to worrying about super.

So how can you make the most of your super, pre-retirement?

We’ve gathered together some of the most useful tips, to help you get started. But the best step you can take, is to talk to a financial advisor, make a plan and put those worries to rest!

Knowledge is power, and planning for your retirement now means you can enjoy every day more without being unnecessarily concerned for the future.

1. Accept more risk

Pete Freeman from MoneyMag says accepting more risk, based on how many years you have to retirement is one of the best ways to get more out of your super.

Like any investment, you can select a low-risk or a high-risk strategy for your super investment. Freeman says age is crucial in deciding how much risk to take, as the more years you have to retirement the more ability you have to recover from any major setbacks.

2. Don’t neglect your super if self-employed

In Australia, if you are self-employed, according to the ATO at the time of writing, you generally aren’t required to make super contributions on your own behalf.

Unfortunately, for some of us, that means we fall into a trap of not contributing to our super at all.

And while most of us do try to save, how many of us actually have ‘super savings’ that we won’t touch until later, and normal savings that we use now for big ticket items like holidays or houses?

If you are self-employed or a contractor who is responsible for your own super, the best thing you can do, is to voluntarily pay your super. Your super fund generally makes it very easy, with online payments, or they can walk you through the process on the phone.

Don’t leave yourself short when you retire so you can spend extra on coffee now, skip that $4 a day and put it away!

3. Make hay while the sun shines!

While we’re young, we have a lot more freedom with our disposable income. We often don’t have the health concerns that older people do, we don’t have kids or mortgages to pay for, we just don’t have as many financial responsibilities.

If you’re a young Australian working in disability support, now is the time to think about your future, and start contributing to it, so you have less to worry about later on.

Talk to your manager about the possibility of salary sacrificing to make voluntary contributions to your superannuation. Essentially this means a little extra is taken from your wage, before you pay tax, and paid into your super account. Win-win!

Win number one is you build your superannuation faster. Win number two is your taxable income will actually decrease, so you end up paying less tax and getting more value – both now and down the track – from what you earn every week.

Outside of salary sacrificing, if you are a low or middle income earner, the Government may contribute to your super, if you make after-tax voluntary contributions yourself. While this doesn’t always add up to a lot, it is money you wouldn’t have otherwise, so why not give it a try!

4. Make sure you’re on track

The reason most people worry is because they feel they can’t control something, they feel helpless. But with super you don’t have to feel helpless.

In your late 30s and into your 40s, make time to see a financial advisor simply to check you’re on track with your superannuation. Let them do the hard work for you and calculate where you’re likely to end up financially, at your target retirement age.

If the figures don’t come to what you’d hoped, you still have plenty of time to get some extra advice and implement some strategies to make life a little more comfortable in your 60s and beyond.

In Australia, we are incredibly fortunate that our Government does try to look after us in our old age, but we do have a responsibility to try to contribute as much as we can.

Though many of us worry about our superannuation and if we’ll have enough, taking a few extra steps now, can help low and middle income earners feel much more comfortable later down the track.

VisiCase provides an NDIS-ready business automation platform, built on powerful workflows. It helps you manage, streamline and optimise every component of your business, and its modules empower a positive employee and client experience.

Disclaimer: Visicase does not and cannot provide financial advice.

Photo by: Matthew Bennett

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