3 ways to add $1 million+ to your superannuation balance
You can retire a millionaire by making these easy adjustments to your super fund now.
One of the easiest ways to grow your long-term wealth is to optimise your superannuaiton.
Despite this, a lot of us are still completely ignoring our super.
According to Finder's Wealth Building Report 18% of Aussies don't know how their super performed over the past 12 months, and 57% are with a default super fund (rather than one they've actively compared and selected).
Here are 3 ways you can optimise your super right now that can add an extra $1 million to your balance when you retire.
1. Optimise fees and returns
Take a look at your current super fund and see what level of fees you're paying. Higher fees will slowly eat into your balance over time.
As a general rule of thumb, fees that are around 1-1.5% of your annual balance are on the higher side. A 30-year old who reduces their fees to just 0.5% p.a. instead can add around $30,000 extra to their retirement balance.
But even more important than fees are the returns. A 30 year old who switches from an average performing fund with a 6% p.a. return to a top-performing high growth fund with a 10% p.a. return can add an extra $520,000 to their final balance.
Not happy with your super fund?
Compare super funds and make the switch.
2. Consolidate funds
About 1 in 5 Aussies have multiple super accounts in their name.
If you've worked multiple jobs, you could have multiple funds. For example, if you worked a few different jobs in your 20s and opted to use your employers default super fund for each one.
If you've got multiple super funds, you're paying multiple sets of fees which over time will greatly reduce your retirement balance.
You can easily see which super fund/s are open in your name via your myGov account online. If you find you've got more than one, consolidate them so all your super money is together in the one fund (and you're only paying one set of fees!).
3. Make extra contributions
If you're able to, adding a bit extra into your super yourself can have a huge impact on your future balance.
For example, a a 25-year old who adds an extra $5,000 a year ($96 per week) could have an extra $480,000 in their superannuation when they're 65.
But it doesn't need to be this much - even an extra $30 a week will hugely add up over decades.
Plus, making personal super contributions lowers your taxable income so you also save on tax (the best way to do this is via salary sacrifice).
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