According to new research by the Commonwealth Bank we all spend on average around 1.5 hours a day on social media, and only 30 minutes a week managing our money. And most of that time spent is actually checking our account balances – not exactly ‘managing our money’.
But as we all know, there’s a little bit more to it than that. We can’t just pick up our finances and swipe down to refresh from where we left off. We have to get into that head space and more times than not, even educate ourselves about what we’re wanting to ‘manage’ about our money before we even get started.
Start by reviewing your super statement
A top tip for getting on top of your finances is to start by reviewing your super statement. Of course no one ever goes on to tell you what to actually review though. To make matters worse, most of the time these so called statements can look like an instruction manual written in a foreign language!
So when you find yourself with that 30 minutes you’re about to dedicate to reviewing your super statement, this will hopefully give you a head start.
Here are some of the key areas on your super statement to be aware of and use as a comparison between funds
- Superannuation Fees
We pay a lot of money in superannuation fees every year. In fact, a report released by the Grattan Institute in 2014 estimated that excessive fees can reduce the average Australian super account balance by up to 20%.
There are all kinds of fees associated with the running of superannuation funds. We all obviously want to keep the total fees deductible from our account as low as possible to ensure our money stays working for us over the long term.
Some of the fees to look out for are:
- Management fee
- Administration fee
- Adviser service fee
- Withdrawal Fees
- Contribution fees
It’s important not to compare funds solely based on fees though. As with anything, the cost is not the only aspect that needs to be considered when choosing where to invest.
- Investment Summary
Here, you should be able to see where your money is invested (otherwise known as your asset allocation). It’s a good idea to check that the funds you are invested in are a match to your risk profile.
You can look up the fund/s you are invested in by searching the relevant Product Disclosure Statement for your fund on your super funds website. You will then be able to see the make-up of the underlying assets and whether they are a match to your risk profile. If you need help determining your risk profile you can visit the Money Smart website.
- Superannuation Performance
According to the Association of Superannuation Funds Australia (ASFA), the average retirement balance is made up of 70% investment returns and 30% contributions. Safe to say performance of your super fund is important!
What is good performance then? Well of course the answer to this question changes every year. So I always do a bit of my own homework. The good news is that research houses conduct and publish this research every year.
Take a look at Super Ratings – you can compare the top 10 performing funds by investment return and search by investment option (e.g. balanced, growth, conservative). Whilst not all funds are accessible to everyone, this is a good indicator of the types of returns that were achieved for similar risk profiles amongst super funds.
Another great site is Canstar – they provide comprehensive research and rate 74 super funds for their investment performance.
Finally, the financial media provide commentary on super fund performance throughout the year (normally in line with quarterly and end of financial year results). Keep an eye out for what they report and you can compare this to your individual fund’s performance.
- Super Insurance
It is possible to have Death, Total & Permanent Disability (TPD) and even Income Replacement (referred to as salary continuance) insurance inside of super.
It is important to review these levels of cover in light of your circumstances to ensure they are satisfactory. If you have insurance inside your super fund and you decide to leave, you may lose this insurance cover.
- Nominations To Superannuation Funds
Have you nominated a beneficiary to receive your super benefit (including any insurances inside super) in the event of your death? If not, you may want to consider making a nomination, as your superannuation balance is not considered part of your estate and will not be dealt with in line with instructions provided in your will.
Now next time your get your super statement in the mail, hopefully it won’t be like reading the manual for your printer in a foreign language 
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