Life can be unpredictable, so it’s best to prepare for and secure your financial future as early as possible. If you want to establish a comfortable life after retirement, superannuation is one of the best solutions for you. It might be a little intimidating, but once you get to know superannuation, you’ll see how beneficial it can be and change the game for you.
Change your mindset and invest in your future. Here are some mistakes you have to correct about superannuation while you still have time.
Mistake #1: Waiting until Retirement before Considering a Super
Many people make the mistake of saving for retirement when they get hold of some extra cash and then start a super fund. That’s not really a good way to do it because it leaves you with no time to save up a decent nest egg.
Sure, you might have the money to invest now, but when you start a super fund, you will no longer be able to use that money to fix the roof or replace a car. It’s best to start setting money aside as soon as you get that first paycheck.
If you start putting away small amounts earlier in life, you’ll have a sizable amount when it’s time to retire.
Mistake #2: Failing to Monitor Superannuation Funds
To make sure you make the most of your super, you must monitor it regularly. You have to review your super balance, assess the performance of the funds, and compare that with other investment options.
Of course, you will also want to see how different strategies in your portfolio performed. If you don’t monitor your super, you’ll end up relying entirely on luck to avoid retiring as a pauper.
Mistake #3: Relying on Super Contributions Entirely for Retirement
Many people believe that super contributions will make up for their lack of other retirement savings. But the truth is that you will still need to supplement your super with additional retirement savings.
It can be a good idea to contribute as much as you can to your super fund. But you should also consider other retirement investments as well.
Mistake #4: Going for a Default Option
Some people see a super fund as something to sign up for and then leave alone forever. This is fine if you’re happy with your bet. But if you want to grow your money, you need to make sure that you are not neglecting it.
You might be thinking that you don’t have the time to monitor your super, that it’s fine to let those professionals do it. But on the other hand, you can make a few simple changes to your super fund that can result in significant returns.
Mistake #5: Assuming the Employer’s Super Fund
Some employers ask employees to join the employer’s super fund. This might seem like a good idea, considering that it will probably be effortless to set up and then leave it to professionals to take care of it.
But on the other hand, this can be a considerable risk because you won’t have control over the funds. You can’t make any decisions, and you don’t have a backup if you want to move your money.
You should always choose your own super fund and manage it yourself or with a financial adviser.
There are a lot of mistakes that many people make when dealing with superannuation. Fortunately, you can easily avoid them with a little bit of knowledge. So, if you want to make your super more effective, learn from these mistakes and take action right away.
With Wealthy You, you can set up a self-managed super fund in Australia. Our financial experts can discuss this opportunity with you and help you take control of your super—and your financial future. Contact us today to learn more.