So, you neglected your super – here are 3 ways to turn it around

Did you know that by the time you're 40, it's recommended to have $156,000 in super savings to set yourself up for a comfortable retirement?¹ But the Australian Bureau of Statistics estimates that men aged 35-44 have an average of $107,700 and women of the same age have an average of $76,900². While there can be a range of reasons why someone hasn’t built up their super savings, including time away from the workforce, a low income or other financial influences, it’s important to know that you can turn this around.

Realising your super balance isn’t where you hoped it would be can be confronting. However, it’s never too late to get your savings on track and start planning for your tomorrow. NGS’ Education Manager, James Perry, shares 3 easy ways to turn your super around.

1. Find your super

‘Sometimes, people can have multiple super accounts and not even realise it. The problem with having multiple accounts is that you are likely to be paying multiple admin fees, it’s harder to track how much you have, and you might be making things harder for yourself by receiving communications from more than one fund.’

It may make sense to consolidate your super so you're only paying one set of fees, receiving one set of communications and it’s easier to keep track of exactly how much you have. Before you consolidate your super, make sure you consider the impact that consolidating may have on your benefits including any insurance that you have.

If you're a member of NGS you can consolidate your super through Member Online. This easy to follow video will show you how easy it is to do. ‘You can also use the government’s tool’.

2. Boost your super

‘If you have neglected your super for some time,’ says James, ‘it might mean you’re not tracking very well towards retirement. But there are steps you can take to improve the outlook.’

James suggests extra contributions.

If you can afford to contribute a little bit extra, salary sacrificing can be a tax-effective way to boost your super savings. Put simply, salary sacrificing is nominating an additional amount from your salary that you would like to contribute to your super savings. These contributions are taxed at just 15% (or 30% for those with incomes over $250,000 p.a.).

There are annual limits on how much you can contribute to your super at the above concessional tax rates. However, if your super balance was less than $500,000 at the start of the financial year, you can look back on your super over the past five years, and if you haven’t used the annual limits, you will have the option to carry them forward. This is a good benefit for people who have neglected their super to catch up.

Learn more about salary sacrificing.

In addition, if you’re a low-income earner and you make an after-tax payment into your super savings, you may be eligible for government contributions. For example, if you put up to $1000 into your super savings, the government will contribute up to $500 – depending on your income level.

Learn more about the government co-contribution.

3. Review your investment approach

‘If your super isn’t on track, another possibility to consider is taking a higher-risk investment approach,’ says James. ‘This means choosing a different investment option rather than the default. Doing this may mean you achieve more growth over the long term. It comes with a higher risk of negative returns in some years, and the other product features (including fees) may be different, but it may be appropriate, particularly if retirement is still a long way off. Every person’s financial situation is unique, and it’s important to consider your other financial goals. To review your investment approach, speak with a Super Specialist or a Financial Planner. Learn more about NGS’ investment options.

Tools and resources

We have a range of tools and resources to help you on your super journey. Access free calculators, articles and more.