The Association of Superannuation Funds of Australia (ASFA) is urging the community to sort out their superannuation, and start the new financial year with a super health check.
ASFA CEO Ms Pauline Vamos says there are a number of changes to super that come into effect tomorrow (1 July 2014), which will help boost the retirement savings of millions of Australians.
"As of tomorrow, all working Australians will get a boost to their super with the Superannuation Guarantee increasing from 9.25 to 9.5 per cent. For a 30-year-old person on an average salary of $60,000, this means an extra $150 a year will go into their super, potentially adding around $6,000 to their final retirement savings."
The concessional contribution caps applied to super for those under 50 will also increase as of 1 July 2014, as a result of indexation resuming for the 2014/15 financial year. This means the concessional contribution cap will rise to $30,000 for people under 50 years of age, with a higher rate of $35,000 applying for those over 50.
Indexation of non-concessional caps has also been restored, increasing the threshold to $180,000 for 2014/15, and boosting the three-year bring-forward option to $540,000.
Ms Vamos says the earlier you start thinking about the lifestyle you want in retirement and planning how you will save enough to achieve it, the better.
"The earlier you start saving, the more your superannuation will benefit from the effect of compound interest. Every dollar you put in super before you turn 35 could be worth around seven dollars in retirement. Even if you can only afford to save just a few extra dollars a week, this can make a big difference to your final balance in retirement.
"The new financial year is also a good time to sort out your super, and take some simple steps that could add thousands of dollars to your retirement savings. At the start of this new financial year, we encourage everyone to spend one hour taking simple steps to get their super sorted."
Simple steps to get your super sorted
- Check your super savings
Get to know your super better by checking your balance regularly, as well as the insurance and investment options you have, to make sure they are the best fit for your circumstances.
- Simplify your super by rolling all your super accounts into one
The more accounts you have, the more you are paying in fees, and the more likely it is that you are paying for insurance or other services that you don't need or can't use. Consolidating your accounts and/or tracking down your lost or unclaimed super could save you thousands of dollars and over time this can make a massive difference to your retirement savings.
- Plan to save more
Even small additional contributions to your super can, over time, help boost your retirement savings by thousands of dollars. As you plan your budget for the year, think about whether you can go without that one or two extra coffees a week, and put this money towards saving for the lifestyle you want in retirement.
For hints and tips on sorting your super, visit www.superguru.com.au
For further information, please contact:
Lisa Chikarovski, Media Manager, 0451 949 300.
ASFA is the peak policy, research and advocacy body for Australia's superannuation industry. It is a not-for-profit, sector-neutral, and non-party political national organisation, which aims to advance effective retirement outcomes for members of funds through research, advocacy and the development of policy and industry best practice.