The costly super mistake many Aussies make and how to fix it

Do you know how much is in your super?

If you can’t recall the exact figure then you’re not alone. A recent Finder survey of 1,034 respondents revealed 29 per cent (equivalent to 6.2 million people) don’t know how their superannuation fund performed over the past year.

The same research found that 16 per cent of respondents weren’t happy with their super’s performance, highlighting a worrying trend: many Australians are heading towards retirement without a clear understanding of how their nest egg is growing.

Alison Banney, superannuation expert at Finder, said having enough money to retire on is a problem many people simply ignore.

“Because the super guarantee is paid directly to your super fund by your employer, many give this money very little attention. It’s often a case of ‘out of sight, out of mind’,” Banney said.

“This ignorance could cost you tens of thousands of dollars come retirement due to reduced returns.

“If you’re not monitoring your super’s performance, you could be leaving the equivalent of an entire year’s salary – or more – on the table by the time you retire.”

Banney warned Australians not to become complacent about their superannuation.

“The difference between an average fund and a top-performing fund can be the difference between just scraping by in retirement and living comfortably,” she said.

“You want to be checking how your super fund is tracking at least annually compared to the rest of the market and whether you are still in the right type of fund for your stage of life.”

One of the easiest ways to stay on top of your super is by reading your annual statement — not just glancing at it, but really using it as a tool to understand how your fund is performing.

Canstar’s data insights director, Sally Tindall says, “Your annual super statement isn’t a piece of mail you want to be filing away unopened. Instead, use it as your yearly reminder to check in on your retirement fund.”

“Superannuation is one of the most significant assets you will ever own, yet many Australians let it run unchecked without a second thought,” Tindall added.

When checking your annual statement, Canstar suggests sticking to the following checklist to understand how your super fund is performing:

1. Check details: Make sure your personal details are correct and your tax file number is recorded.
2. Review contributions. Check your employer has paid you the right amount of super over the year.
3. Assess your returns and fees. Understand how your fund performed over the last year, but also the longer-term returns. Compare this to the top-performing funds. Also, check the fees you’re paying are reasonable.
4. Size up your balance. Check your balance is on track for a comfortable retirement.
5. Assess your investment mix. Make sure it will deliver on your long-term goals but isn’t taking on an excessive amount of risk for your age.
6. Review insurance in super. This may include life, total and permanent disability, and income protection insurance to make sure it suits your needs.
7. Confirm beneficiaries. Review who is the binding or non-binding beneficiary.
8. Consolidate multiple accounts. Consolidating your accounts into one could save on fees and make it easier to track your retirement savings.

Keeping tabs on your super may not be the most exciting task on your to-do list, but a few minutes once a year could make a huge difference to your future. By staying informed and proactive, you’ll give yourself the best chance of enjoying a comfortable, financially secure retirement.

Read more: Quick ways to help boost your superannuation

IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.