Boosting your super

A recent report by the leading accounting firm, Deloitte’s, found financial ignorance is the biggest single issue facing older Australian’s planning their retirement, followed closely by the fear that they don’t have enough money to retire.

The two issues of course go hand in hand. Most people hate super and so they ignore the fact that it is the single most valuable way to build your savings and ensure that you do have enough money for when you do stop working.

If you do nothing else, just focus on these six simple steps to build your super savings and then just leave the rest to time and compound interest. You will be surprised at how quickly your super balance will build.

Step one is consolidate your super in to one high quality super account. This might seem obvious but so many people still have numerous super accounts, with each one just duplicating fees and charges and reducing you overall super balance.

According to the Australian Tax Office there is some $16 billion in lost super. Step 2 is make sure you search the lost super registry to make sure that if you’ve lost control over an old super account sometime in the past that you take back control.

Step 3 is ensure you are receiving your full super entitlements from your employer. If you believe you are not receiving your fair share and don’t want to have this conversation with your employer, just contact the ATO and they will investigate on your behalf.

Contribute any spare dollars you have into super as part of step four. Once you retire and set up your own private pension from your super, all the assets become tax free both regarding any income or capital gains generated. This along should be incentive enough to put as much money as you can into super.

In addition to your tax-deductible limit of $27,500 including your super guarantee contributions, you can contribute $110,000 a year to super as a non-tax deductible contribution. As you get closer to retirement you should be trying to boost these contributions as much a s you can.

Also, think about downsizing, that is moving from your large family home to something smaller and comfortable and contributing any spare funds you might have to super.

This is step five and as a couple you can contribute up to $600,000 to super without impacting on your other contribution levels. This one step can be a total game changer as you move into retirement.

Finally step 6, make sure you are using a quality super fund to manage your super savings and ensure that you get good advice. Superannuation can be a very complex area and it is possible to get a lot of things wrong and the consequence of doing so can be costly.