Over the past several years I have heard many people say they receive their super statement but do not read it, do not understand it or both! By now you should have received your latest super statement and I have noted some key points below of areas you should look for on your statement to make it easier to understand:
1. What contributions have been paid into the account?
Unfortunately, most people assume that if a super contribution amount appears on their pay-slip that amount has been paid into their super fund. This is not always the case. By law, your employer must pay contributions at least quarterly. Check your statement to make sure these are being paid regularly. Remember, this is your money! If you notice that contributions haven’t been paid regularly, there are steps you can take. Please call if you would like to discuss.
2. Your portfolio option:
If, like most people, you have not actively selected an investment option, chances are you are invested in the default “Balanced” option or something similar. This may or may not be appropriate for you as you may be a more conservative or assertive investor. You have control over how your super is invested, so if you are unsure whether you are invested in the appropriate option, speak to us to help determine your preferred investment allocation.
3. How much insurance you have:
There is always a section on your super statement that shows how much insurance you have. Typically there will be life (or death) cover, total and permanent disablement (TPD) cover and income protection cover. Depending on your stage in life, this cover may be more than enough or it may not be enough. To determine whether you have adequate cover, please give us a call.
4. Nominated Beneficiary:
If you were to die, your nominated beneficiary will receive your super balance plus any life insurance linked to your super fund. This could be hundreds of thousands of dollars. Choose your beneficiary carefully to minimise people fighting over your benefit when you are gone. There are different types of nominations and there are certain people that can and can’t be nominated. If you would like to know more, please contact me for more information.
5. How many super statements have you received?
If you have more than one super fund, you could be paying excessive and unnecessary fees. If you want to consolidate your super funds but don’t know where to start (having read the points above) speak to us for advice.
The points above are designed to help you better understand your super statement because now that the super guarantee has increased to 9.25% of your income, there is more money going into super. Remember, it is your money and it may be a substantial nest egg in the future so it’s important to pay more attention to super!
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