A GOOD TIME TO REVIEW YOUR SUPER SETTINGS

When the global financial crisis hit, were you comfortable that your superannuation ‘settings' were right to still achieve your financial goals?  If it happened again would you want to change anything?

It seems that the worst of the global financial crisis is behind us, after experiencing strong growth in financial markets in the second half of 2009. By December 2009, the Australian sharemarket had rallied 50% above the lowest point reached in March 2009, presenting a good opportunity for you to review your financial plan and ensure you have the right strategies in place to achieve your financial objectives.

There are three simple things to consider to ensure you remain financially prepared for retirement.

Consolidate all of your funds

Consolidating all of your superannuation accounts can reduce the amount of fees you pay. Australian Securities and Investments Commission research found that paying 1% more in fees on your super assets can reduce your retirement money by more than 20% over 30 years, for example, reduce it from $100,000 to $80,000.

By rolling all of your funds into one account, it will also be easier to keep track of how much superannuation savings you have.

Are you contributing enough?

Research by the Association of Superannuation Funds of Australia indicates singles need around $38,000 per annum to retire comfortably, and couples need around $51,000 per year. 

With those figures in mind, are you contributing enough extra into your superannuation to ensure you will be able to support a comfortable lifestyle in retirement?

There are two ways of making regular superannuation contributions, depending on your financial situation: salary sacrifice, which is a pre-tax contribution arrangement organised through your employer; and after-tax contributions that can also be arranged through your employer or paid directly to your superannuation provider.

If you make after-tax contributions, you may also be eligible to receive a Commonwealth Government Co-contribution of up to $1,000.

By contributing small, regular amounts to your superannuation, you could make a big difference to the amount you have when it comes time to retire.   Being prepared and having the basics right to help you meet your long-term investment objectives will also reduce anxiety when there are fluctuations in the market.

Check you're investment choices

Some people are comfortable managing risks with their retirement money whilst others prefer a much more conservative approach.  The way you like to invest is often called your risk profile.

Often a person's risk profile will change over time as their objectives change.  For example, younger investors might be willing to accept a higher level of risk than people just about to retire, or in the retirement phase.

It is important to make sure your super investments reflect your current risk profile and consider changing your investment plan if another is better suited to your risk appetite.

Get help from the experts

While it is important to consider these factors to ensure you are on track to achieve your financial objectives, you don't have to navigate through the daunting world of superannuation on your own.

GESB offers access to a Simple Advice service* that can help you choose the investment plan that best suits you and ensure you are using the right contribution method to maximise opportunities for your financial situation. This service is provided at no additional cost to members and takes about thirty minutes over the phone, depending on your enquiry.

GESB also has a wide range of online tools and calculators, as well as free education seminars available to help you learn more about superannuation and retirement.  

For more information, please visit the GESB website at gesb.com.au, or call the Member Services Centre on 13 43 72. 

*Simple Advice is provided by GESB's financial planning subsidiary, GESB Financial Advice (AFSL 309268). It is only available to GESB members.

This information is general and does not take into account your investment objectives, financial situation or needs. Financial advice is provided by GESB Wealth Management Pty Ltd trading as GESB Financial Advice AFSL No. 309268.