When I open a bottle of wine I usually pour a glass for myself, a glass for my wife and then I leave the rest in the bottle for another day – this week’s precious drop is a Balthazar of The Barossa Shiraz 2010.
In reflecting on this occasional mid-week ritual of mine, a three-way split each time is also what typically happens to most people’s pay; some goes to you, some goes to another…and, the remainder?
Well, some of us leave a healthy portion for the future, whereas others leave just the sediment.
Generally three payments are made by your employer each time one of your payslips is processed: a tax payment to the Australian Taxation Office, a payment to your bank account net of tax; and, lastly money into your super fund.
Superannuation privides income in retirement to substitute or supplement the Age Pension. For me, that money is much like that healthy residual drop that makes wine-tasting even greater as I age.
To ensure you have more than just sediment in your super fund, here’s some tips to ask yourself to help kickstart the tasting experience:
Where is all your super? Find any lost superannuation and ATO-held superannuation benefits by doing a quick search on the ATO’s SuperSeeker website. Every little bit counts especially with the power of compound interest.
How many funds do you have? Consider the consolidation of multiple superannuation accounts to save on the duplication of product and investment fees as well as personal insurance premiums.
In some instances it may make sense to have multiple superannuation accounts. For instance where you have a prior medical condition.
What fees are being charged? As a general rule, the less you pay in fees the more your superannuation benefits will grow.
To find out if your superannuation fund is charging your superannuation account high or low fees, compare it to other similar superannuation funds.
How is your super invested? When choosing your investment option, consider: your age; the importance of diversification, how comfortable you are with investment risk; and, how long before you are able to access your retirement nest egg.
Higher risk does not always equal a higher return; it only gives us the possibility of a higher return and in some cases a higher potential loss.
Do you have a Plan B? This means, do you have the rights types and levels of personal insurance in place within your superannuation account.
I say this often, but I will say it again – your capacity to earn an income now and into the future will be one of the major driving forces behind retiring hopefully debt-free and with a comfortable nest egg to fund your retirement lifestyle…so, it makes sense to insure against the what ifs in life.