Super statements are due to arrive in letter boxes soon. When yours arrives, it’s important to take a proper look because it could become one of the biggest assets you’ll ever have. Here’s Advice SA’s quick guide to what you should watch out for and why.
1. Personal details
Check your name and address are present and correct. Not having the right details could lead to you having unclaimed super if you change jobs or move house. You can update these details with most funds on their website.
2. Tax File Number (TFN)
Having your correct tax file number means your super fund will be paying the right rate of tax on your super contributions and investment earnings. If your TFN is missing or incorrect, the fund may be deducting tax at a higher rate.
3. Employer contributions & transactions
The statement should provide a detailed list of all transactions during the statement period, including contributions from your employer and investment earnings. And there will be deductions shown for tax, administration fees and insurance premiums (if you hold insurance via your super fund).
4. Your balance
The statement will show the opening and closing balance of your fund for the statement period.
Ever wondered how much super you should have for your age? Understanding the benchmark of how much others in your age group have saved for retirement through their super can be a useful reference guide. The latest statistics available is the 2016 Australian Bureau of Statistics Survey of Income and Housing.
5. Investment options
Most super funds offer a range of investment options. Your balance is likely to be invested in a default option if you haven’t made an active choice. Different investment choices carry different levels of risk, expected return and fees.
A financial planner from Advice SA can provide advice on selecting an investment option suited to your life stage and circumstances.
All super funds will charge a fee for administering your account. There will also be fees associated with your investment option/s. Paying too much in fees can quickly erode your super balance so it’s important to make sure you’re getting enough investment earnings to justify any fees you’re paying.
7. Insurance premiums
Super funds are required to provide certain types of personal insurance to their members by default and take premiums from your super balance to pay for the cover.
The statement will show what type of insurance cover you have and the amount of premiums charged.
Super funds offer different types of insurance cover, including Death, Total & Permanent Disablement and Income Protection. To help you understand the types of insurance suitable to you, your super fund’s website will have a product disclosure statement (PDS) which explains the insurer they use and details of the cover available.
Paying for personal insurance through super can be a way to make your policy more affordable but there are lots of things to weigh up when it comes to getting personal insurance right.
A beneficiary is the recipient of your death benefit. You can nominate one or more beneficiaries, or the Trustees of your super fund can determine them according to the governing rules of the fund.
If you’ve nominated a beneficiary or beneficiaries for your super – perhaps your spouse, partner or children – then this will be included on your super statement too.
There are two types of nominations available.
- Non-binding: A non-binding nomination is a suggestion to the Trustees of your super fund. They aren’t obliged to carry out your directions, but will consider your nomination when making their decision regarding the distribution of your benefit.
- Binding: A binding nomination is just that. Your nomination directs the Trustees of your super fund regarding who receives your benefit, as well as the percentage they receive, and they are bound to the execution of your wishes relating to the distribution of your benefit. Binding nominations are only valid if all relevant criteria are met.
Taking an interest in your super is important – regardless of your age. If you’re looking at multiple super statements from different funds, then it may be worth consolidating your super into a single fund to save on fees. Before choosing one fund over another, it’s worth checking to make sure you’re continuing to get the right insurance cover and investment options with your preferred super fund and for a competitive fee.
At Advice SA we provide goal-based advice through discovery meetings that allow you to uncover your ‘blue sky’ dreams. Contact Us to find out what’s possible for you.
Mark Bastiaans is an Authorised Representative #296627 of Guideway Financial Services Pty Ltd ABN 46 156 498 538 AFSL 420367.
The information provided above contains general advice that does not take into account your financial situation, specific needs or objectives and is not intended to be personal financial advice and should not be relied upon without written advice from Guideway Financial Services Pty Ltd.