When To Review Your Super
A lot can happen between the time you get your first job and the time you retire. By then, you may be married, have a family, have a property or even been through many different jobs. All of these events will have major impacts on your finances and all of these key events are great times to review your superannuation to see how your retirement money is tracking and whether you will be able to achieve your goals and objectives with your current superannuation.
Changes in family structure
Finding a life time partner is exciting and while super isn’t really thought about, it’s one topic that is worth discussing. As a couple, it is best to consider ways to make the superannuation journey a partnership. While you can’t combine superannuation with your partner, you may be able to maximise each other super balance through spousal contributions. You can even boost the super balance of your partner while they are on a parental break or simply access the Tax Offset of up to $540 if your partner earns no or low income.
Furthermore, insurance is also a topic that needs to be discussed to provide security for you, your partner or dependents in the event of illness, disability or death. A simple review of insurance could save a lot of pain later. Most super funds offer basic insurance when you sign up so it is essential you increase, decrease or cancel the insurance depending on your needs.
Purchasing a property
Buying your first property or any property can be an exciting and stressful time. Taking on debt is a huge commitment and must be carefully considered. A property tends to be the biggest investment you make and it is important to review your insurances to ensure in the event of a disability or death, your family is still protected and does not lose their home. When looking through your insurance consider factors such as whether the amount of cover you have will cover your debts until your partner will be able to be stable again. Another consideration is if you can never work again will your TPD cover your expenses and costs associated with your disability.
Any movement between jobs will have a heavy impact on your lifestyle. If you are earnings more income in your new job you may want to consider contributing more to tour super without noticing a change in your take home pay. A salary sacrifice arrangement that may be offered by your employees is a voluntary super contribution which could you help save tax when you contribute the money and on gains made by the contributed money. It can help you save more money for retirement but always consider your debt levels before making these contributions as you cannot access it until you’re 65 in most cases.
Alternatively, when losing a job, it is also important to check your super. It is imperative to see if you are paying unnecessary fees by managing multiple super accounts. This can be prevented by consolidating your super into one account so you pay a single set of fees plus have the advantage of easier account management.
The last event we will discuss that it is important to look at your super is when you receive financial windfall such as inheritance, work bonuses or even a lottery win, which can all present an opportunity to improve your financial situation. By investing this money into a super fund will allow your money to compound over the years leaving you in a better situation for a retirement. However, it is important to consider any contribution caps that may apply to the super account so you’re not paying any additional tax.
Just because you only can access your super at the age of 65 doesn’t mean it should be put away until you retire. Reviewing your insurance, nominating your beneficiaries and checking how your super is preforming are great simple things to do to make sure your super is working hard for you.