The small moment that sets you up for retirement success

For most of us, superannuation statements don’t sound like riveting reading - but if you know where you’re looking they can be surprisingly engrossing.

In fact, learning how to decode your statement can be very rewarding, says Iby Ibrahim, technical advice manager with Aware Super.

“Taking the time to understand your super statement can help you take control of your financial future,” he says.

Iby Ibrahim, technical advice manager with Aware Super.

“By acting on what you see, you can make smarter decisions, spot opportunities, and stay on track towards your retirement goals.”

What to look for

Ibrahim recommends looking for the following information in your super statement:

• Your balance. Look at your super balance and check how it compares to previous years.
• Your investment performance. This shows how your chosen investment option has performed over the past year.
• Contribution history. Check that all your contributions, both personal and from your employer, have been paid.
• Fees. Review the breakdown of fees you’ve been charged.
• Insurance cover and premiums. Check what types of insurance you have through your super, and how much you’re paying in premiums. Make sure the cover suits your needs and life stage, and that you’re not paying for insurance you no longer need.
• Where your money is invested. Your statement will show how your super is split across different types of investments. It’s worth checking that your current mix aligns with your goals and comfort with risk.
• Nominated beneficiaries. Make sure your nominated beneficiaries are up-to-date and correctly recorded. If they are listed as binding, they generally need to be renewed every three years to remain valid.

What’s considered a good return?

Over the past 30 years, the average super return has been 7.6 per cent. But, of course, every year is different. Your return will vary depending on market cycles and your investment options, which might be high-or low-risk, balanced or conservative.

When it comes to comparing your fund’s performance with other funds, Ibrahim recommends comparing 10-year returns to get a long-term view.

If you’re in a MySuper investment option – the default option that a fund will put you in if you don’t specify otherwise – you can compare this with other MySuper products via the ATO’s YourSuper comparison tool.

How do fees work?

Your statement will show all the fees you have paid over the financial year. These may be a combination of administration fees, investment fees and activity-based fees such as advice fees and investment option switching fees.

“Fees can vary based on your fund and investment choices, with high-growth options sometimes having higher fees than balanced or conservative options,” Ibrahim says.

The YourSuper comparison tool can also help you compare the fees that different MySuper funds charge.

“Choosing a fund with competitive fees can make a huge difference to your super balance over time,” Ibrahim says.

How do I check my insurance?

Your super statement will have a section dedicated to insurance. Ibrahim recommends looking out for:

• The types of cover you have. For example, death, total and permanent disability, and income protection.
• Coverage amounts. Review how much you’re covered for under each insurance type. Make sure the amounts are appropriate for your personal circumstances.
• Premium costs. Look at how much you’re paying in premiums, both annually and per payment period, so you can assess whether the cost aligns with the value of the cover.
• Changes since your last statement. Pay attention to any changes in your cover or premiums since your previous statement.

What if there’s something I don’t understand?

“If something on your statement doesn’t look quite right or is unclear, it’s important to get in touch with your super fund,” Ibrahim says.

“Statements are also a great annual reminder to check in on your super,” Ibrahim says.

“We know super can sometimes rank low on the life admin list, but statements are a valuable prompt to spend just five minutes reviewing because that small moment can make a big difference to your retirement success.”

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making financial decisions.

Expert tips on how to save, invest and make the most of your money delivered to your inbox every Sunday. Sign up for our Real Money newsletter.