Your superannuation checklist at every age and life stage

You're never too young, or old, to get your money in order.

It might not be the juiciest topic of discussion — compared to I’m A Celebrity… Get Me Out Of Here! weight loss and Married At First Sight scandals — but superannuation is certainly important and worthy of your attention.

With recent stats showing that women are retiring with almost 40 per cent less super than men, there’s no time like the present to start thinking seriously about how to get your super in check, so you mightn’t face the same fate in the future.

To help kick-start the process, we chatted to Gemma Pinnell, Director of Strategic Engagement at Industry Super Australia, to bring you up to speed on superannuation and arm you with an action plan, whatever your age or life stage.

How financially literate are you? Take the quiz to see how much you know about your personal finances. To sharpen your finance knowledge, be sure to check out Bauer’s Financially Fit Females hub.

Set your superannuation foundations in your 20s

Our 20s are a busy and constantly-changing decade and, as most of us probably know from experience, not always the age that superannuation is ranked as a high priority. But, the fact is, it’s never too early to think about your retirement plan.

In this decade, it’s worth taking the time to consolidate multiple super accounts from your teenage part-time jobs into one fund. The benefit: you’re likely to pay lower fees and your money instantly becomes easier to manage.

If you’re feeling a little lost on what super fund to choose, Industry SuperFunds consists of 16 different funds and they are all public offer, meaning that you can be a member of them regardless of which industry you are in. And the best bit is their fees are low and all profits are sent back to their members. A win-win really!

New financial investments will affect your super in your 30s

With a consolidated super fund (tick), it’s time to start thinking about your life goals and how they’ll impact your future and your super. Your 30s are often the time people settle into a career groove, might be thinking about starting a family and potentially become first-time homeowners with a mortgage to take care of.

The financial pressure amps up in this decade, but that doesn’t mean you should neglect your super.

If you’re gearing up to go on maternity leave Pinnell reminds us: “Superannuation is not paid on maternity leave. [Employers can choose to continue paying it, but they’re not legally obliged to.] This time out of the workforce is a contributing factor as to why women retire with, on average, 40 per cent less super than men,” says Pinnell.

That being said, if you’re about to go on or are returning from maternity leave, you might want to think about “sacrificing” some of your before-tax salary and putting it into your super fund.

This is great for high-income earners as you’ll save on tax. For lower-income earners, you might want to consider after-tax contributions to your super instead. You can reap the benefits of the Federal Government’s Contribution Scheme which has been designed to help boost your retirement savings.

Make concessional contributions in your 40s

Make like those other 40-and-fabulous women, Gwyneth Paltrow and Jennifer Lopez, and have a kick-ass decade, knowing that you’ll be financially secure in your future. How? By being on top of your super and having the foresight to know what you need to live comfortably when retirement rolls around in the next 20 years or so.

Pinnell suggests using this time to set up a realistic superannuation savings plan and get your finances in check.

“Endeavour to pay off your home, or get onto the property ladder,” she says. “The family home is exempt from the pension assets test and renting can be used as a predicator of poverty in retirement.”

Either way, whether you’re renting or paying off your mortgage, the lesson is clear: don’t forget about your super!

And remember, your 40s are likely to be your peak earning years so use them wisely. If you have money to spare, “make the most of concessional contributions but be careful not to exceed the $25,000 cap,” Pinnell says.

The more you can invest in your super now, the better.

Turbocharge your super in your 50s and 60s

The later years of work are the final chance for you to put your foot down and get your super well and truly in excellent shape. Now is the time to start thinking about who will get your super if you pass away. It may sound morbid, but super isn’t treated the same way as the rest of your estate — it doesn’t automatically go to your next of kin — so make sure you set up a binding nomination, in the same way you’d get a will drawn up.

Another important superannuation must as this stage? Work toward paying off any outstanding debts — you want to enter retirement in the best possible place to avoid unnecessary financial stress.

And, most important of all, think about upping your super with both pre-tax and after-tax contributions, as much as your cash flows allow. Remember: the greater your super funds, the more comfortable your retirement will be.

Brought to you by Industry SuperFunds

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