Do you know your current superannuation balance?
Only 37% of Gen Y Australians know how much superannuation they have.
Considering that most Australians will rely on their superannuation to fund their retirement, it's fairly concerning to learn how disengaged Australians are with their super. Only 42% of Australians know their exact superannuation balance, according to new research by finder.com.au.
Young Australians are even less engaged, with only 37% of Gen Y knowing their current superannuation balance. And the reason for not knowing? Well, 11% said they don't remember, 7% said they've never bothered checking and 6% said they don't know how to check their balance.
However, it's the younger generations that should be the most engaged with their super. Most young Australians will have superannuation for the majority of their working lives, and therefore have the most to gain, and also the most to lose if it's not managed properly. In October 2017 robo-adviser Stockspot released its Fat Cat Funds report which revealed millennials could pay over $300,000 in fees alone if they stick with a fund with high fees. That's over a quarter of their potential super balance, all eaten up by fees.
When the Fat Cat Funds report was released Stockspot CEO Chris Brycki said it's important for Australians, particularly young Australians, to check their super balance and what fees they're paying. "Simply switching out of a fund charging 1.99% to one charging 0.5%, all things equal, a male millennial could boost their super balance by $355,957 and a female by $306,291. That’s a lot of round the world trips!"
Money expert at finder.com.au Bessie Hassan says it's especially important for young Australians to keep on top of their super, to benefit from the power of compound interest. "Starting a super fund early can lead to more super when retiring due to compounding. Building up that super fund with concessional or non-concessional contributions will mean that compound interest will take effect at a greater scale. Tracking the progression of your super means that if you’re not satisfied with how it’s performing you can make changes to the investment strategy early while you still have time to have an impact.”
The New Year is a great time to get your super sorted. Check your balance and what fees you're paying, and if you're not happy with what you find consider switching super funds.