The five questions to help your super catch up with the times.

Have you saved enough for retirement or have you left your super behind in the 70s? If you’re over the age of 40, compulsory super arrived later in life, so you may have missed a number of years to save for your retirement.

Even though you might have started later, we have five things to focus on to make a difference to your retirement savings.

1. How much should I contribute?

If you’re working, your employer already makes contributions to your super for you. You can also make your own contributions – before or after tax – which can make a big difference to how much you have at retirement.

› More on contributing to your super

2. How should I invest?

As you approach retirement, you may be tempted to try to protect your savings from market downturns by moving away from growth assets and making more conservative investment choices. The reality is that investment earnings remain critical to achieving your retirement goals.

Just 10% of your retirement income is made up of the money saved during your working life. Another 30% comes from investment earnings before retirement, and a massive 60% comes from investment growth after you retire.* This is known as the Russell 10/30/60 Retirement Rule and it illustrates why maintaining growth assets in your portfolio is so important.

We are also living longer than ever before, so your money may need to last you 20 years or more. That’s a long time; it means you can take advantage of the potential for higher returns offered by growth assets because you have time to ride out market movements.

› More on investment choice

* With a portfolio of roughly 65% shares and 35% bonds.

3. Am I in one fund?

Sometimes people keep more than one super account because they think it spreads their investment risk. The reality is that if you have more than one super fund you could be paying more fees than you need to. Ultimately this means you will have less savings for retirement.

Consolidating your super can help you:

• pay less fees
• manage your investments more easily
• cut down on paperwork

› Consolidate now (pdf)

4. What protection do I need for myself and my family?

Make sure your savings are protected from unexpected events. Generally, through super there are three types of cover:

• Death insurance – a lump sum paid in the event of your death.
• Total & Permanent Disablement (TPD) insurance – a lump sum paid in the event you are unlikely to work again due to a total and permanent disability.
• Income Protection or Salary Continuance insurance – a monthly payment, typically 75% of your income if you are sick or injured and can’t work.

Provided you were eligible when you joined Russell SuperSolution, you will automatically receive a basic level of cover, but may not have all three types of insurance. You may also be able to apply for additional voluntary insurance cover above the basic level.

For most members there are real benefits of having insurance cover through your fund:

• Quicker – automatic cover if you are eligible when you join the fund
• Cheaper – insurance premiums are lower as your fund receives a bulk discount
• Convenient – premiums are paid from your super, not from your pocket.
  

For further details on the insurance cover available in your division of the Fund, please refer to your Product Disclosure Statement by logging in to your account

More on different types of insurance

• Death insurance
• Total & Permanent Disablement insurance
• Income protection insurance

5. When should I retire?

There are a number of factors to consider when thinking about when to retire. These include:

• health
• finances
• home
• interests & hobbies
• legal issues.

Working longer has a double impact on your super – you have more time to grow your savings and you also delay the time before you start to access your money. So you may want to consider this when planning when to retire.

You now have more options when transitioning to retirement which means much more flexibility. Today the Government allows you to access your super while you are working, provided you have reached your preservation age (between 55 and 60, depending on when you were born).

A transition to retirement strategy allows you to cut your working hours and use your super to supplement your income. Of course this means that you are dipping into your savings too, so be aware of the impact this could have on your retirement lifestyle.

By addressing these five questions, you’ll be well on your way to getting your super on track so you can get the retirement you want.