Retirement question a quarter of Aussies can’t answer
What is your retirement fund?
That’s the question one in four Australians can’t answer, as concerns grow about workers not paying enough attention to their retirement plans.
Nearly 26 per cent of Australians don’t know the name of their super fund, with the figure rising to 28 per cent for young people aged 18 to 34, according to a survey by super bodies’ peak body.
For those in the know, around a third rarely check their super balance or only do so once a year.
The Super Members Council warns this leaves people at risk of retiring with less money than they could have.
“If you don’t check or take care of your pension regularly, you could be missing out on thousands, even tens of thousands of dollars in retirement,” said council president Misha Schubert.
If workers do not check whether they are being paid super by their employer, they could lose valuable compounding investment returns; it’s a problem that affects 3.3 million people and costs approximately $6 billion a year.
People who have not combined their super accounts may be paying more than one fee.
Modeling from the council shows that paying 0.1 per cent more in wages could leave someone $14,000 worse off in retirement, while paying one per cent more could see someone miss out on $128,000.
Ms. Schubert said this relief may be due to the fact that it is difficult to imagine retirement for those at the beginning of their working lives.
“For many young people, retirement feels like it’s a long way off, so it can be easy for them to get busy with their lives and not think too much about their retirement benefits,” he said.
Young people are six times more likely to take action to improve their retirement savings when they better understand their retirement.
“The more engaged you are with your retirement, the more likely you are to make important decisions at life stages that will help strengthen your financial security in retirement,” Ms. Schubert said.
Workers should make sure all retirement benefits are paid, consolidate their accounts into one, ensure they have a top-performing fund and consider making extra contributions.
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