The recent decision by the Albanese Government to double the concessional tax rate on superannuation balances of more than $3 million has highlighted an underlying issue with superannuation more generally – the disconnect between Australians and the money in their super accounts.
While the Government insists the changes – effective from July 1, 2025 – will impact less than 1% of super accounts, I’m willing to bet the majority of the population don’t truly know whether or not this change WILL affect them, either now or in years to come.
That’s because too many people aren’t engaging enough in their super accounts, and aren’t aware of how much super they will, or won’t, have by the time they reach retirement.
As the cost of living continues to spiral upwards, and our life expectancy increases, it’s never been more important to take an interest in your superannuation account, to ensure you can maintain your standard of living as you get older.
The Australian Bureau of Statistics shows life expectancy for men and women in Australia is around 81 and 85 years respectively. There are clearly many years of living to be done once you’ve finished working, and I wonder whether people have considered how they’re going to pay for that.
I believe the nature of our compulsory superannuation scheme here in Australia – whereby employers are generally the main contributors – means there’s a disconnect between workers and the money in their super accounts.
There is no ownership and accountability bred into a system when the general understanding is that superannuation is your employer’s obligation and is simply an employee’s legal right.
However, it’s vital that you remember it’s your money sitting in that account, and you should care about where it is and what it’s doing.
In my experience, if people make regular contributions to their fund, they start to become more aware about exactly how much money they have, and tend to be more emotionally invested in making that money work for them – whatever that looks like.
However, there are other ways people can become more engaged in their super, beyond extra contributions;
- Know What You Currently Have: Where are your employer superannuation contributions going? Do you have more than one super account? Do you have old accounts that need to be rolled over? They’re simple questions, but if you’re not sure what account you have or how you can access your statements, then you need to find out.
- Read Your Statements: Pay attention to the information being provided in your statements and become familiar with the language used. Are you comfortable with how much you are paying in account fees and charges, and do you know what you are entitled to as part of your superannuation membership? Are you contributing towards a life insurance?
- Ask Questions: If you don’t understand something, ask. There are no stupid questions.
- Make Investments Other Than Money: Even if you can’t afford to make extra financial contributions to your super account, you can always invest your time in learning about your individual account/s and making sure you understand what the product is, and whether or not it’s right for you and your lifestyle.
- Consider Your Options: Is your current fund right for you, your lifestyle, and your retirement plans? While some workplaces may recommend you sign up with a specific fund, you don’t have to take the default option and can choose another fund, or may even consider a self-managed super fund, if it meets your needs.
- Consult an Expert: If it all feels too overwhelming, it’s best to ask an expert. Superannuation doesn’t have to be complicated, and having the basics explained to you is a great place to start.
The key is starting small and starting early, as you are never too young to start thinking seriously about your superannuation account.
Simply being engaged in your super and making small changes while you are younger could make a huge difference by the time you are ready to retire.
Naz Randeria is the Managing Director of Reliance Auditing Services
About Reliance Auditing Services
Founded by Managing Director Naz Randeria over a decade ago, Reliance Auditing Services is a specialist independent auditing services firm, specialising in audit of self-managed superannuation funds and also providing external audit and assurance services to clients across Australia. The team offers more than 25 years’ experience across a diverse range of businesses and organisations.