The 4 C’s: ways to grow your super
So you want to grow your super. That’s great news, because small changes today can make a big difference in the future thanks to the magic of compound interest. This simply means that the longer you leave your money to accumulate, the more it has an opportunity to grow.
To make it simple, we've identified the 4 C’s – key words for you to keep in mind when thinking about your super. These are:
They are defined in a nutshell here. If you’re interested, learn more with our specialist superannuation strategies.
Consolidation
Consolidating your super can make a big difference to your super savings – and it makes keeping track of your money easier.
If you’ve ever changed jobs, chances are that you’ve got more than one super fund. Putting all your super money in one fund means you:
- Pay just one set of fees and charges.
- May qualify for fee rebates due to an increased account balance.
- Simplify your paperwork.
- Are better placed to manage your super’s investment strategy and asset allocation.
Before you transfer your super you need to:
- Check whether any exit fees or transfer fees apply.
- Consider the effects of any loss of insurance cover.
- Compare the fees that apply to each super account.
- Compare the investment options and features of each super account.
Once you have all this information, you’re in a good position to decide whether it's best for you to transfer or not.
There are billions of dollars of lost super at the Australian Taxation Office. Use AMP’s SuperSearch to find your lost super.
To consolidate or transfer your super with AMP, select and download the appropriate transfer form for your AMP super fund.
Contributions
What do you contribute to your super, apart from your employer’s contributions? And have you thought about how you can kick-start your kids’ or spouse’s super?
Here are some tips on making the most of your contributions:
- Government co-contributions: if you qualify, the Government will add up to a maximum of $1.50 for every $1 of personal contributions you make to your super (up to a maximum of $1,500).
- Fast start: kick-start your kids' super to take advantage of the government co-contribution.
- Salary sacrifice: this is a great tool to reduce the tax you pay and increase your super savings.
- Take a fresh look at your mortgage repayments: instead of pouring all your money into your home loan, it may be more effective to put the money into super (where you pay less tax), and then pay the mortgage off once you retire.
- Understand the 'bring forward' contributions rules: you may be eligible to pay $450,000 into your super at one time (then nothing for the next 2 years) and take advantage of the tax-friendly treatment of super investment earnings.
- Transition to retirement income swap:once you have reached preservation age, this a great strategy for making your super work harder in those all-important last few years of work.
Choice
Superannuation can seem a complicated topic. People often don’t know where to start, and they’re not convinced that taking charge would actually make a difference.
Yet the reality is that some key choices or decisions you make – whether you mean to or not – could make a significant difference to your super in the long-term. You should consider:
Cover
One of the most tax-effective ways to protect your family and investments can be to make sure you have appropriate insurance cover through your super fund.
Most funds offer life insurance, income protection and temporary salary continuance insurance – you should check with the individual funds to find out what’s available.
Insurance is often a valuable built-in feature, but it’s not the same across funds and should not be overlooked when comparing one fund with another.
Make sure you ask the right questions to understand the level of cover your fund offers and the costs and benefits associated with it.