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FIVE GOOD SUPER HABITS FOR THE YEAR OF THE TIGER 2022


Active Super

Beginning the Lunar New Year with a few simple habits can make a difference to your future superannuation balance. 

While some Lunar New Year’s resolutions can go quickly awry, super habits are often easy to stick to with the right planning. In fact, once a strategy has been set for the 12 months ahead, it’s often a matter of simply checking you’re on track. 

Here are five things you can set up now to make 2022 a good year for your nest egg.

1.Set a superannuation saving goal for the year

A great way to kick off Lunar New Year is to decide how much you’d like to put towards your retirement this year. Not only will it keep you motivated for the next 12 months, but the raw amount you save will likely grow due to the power of compounding interest. 

Compounding means you receive interest on both your principal investment and your interest. In other words, you earn interest on your interest. Over time, these incremental interest injections can accelerate the returns on your initial investment, with the effect increasing the longer you’re invested. The longer the investment horizon, the higher the amount of compound interest. 

You can do your own calculations on how much you can afford to save and what that could earn in interest using a compounding calculator.

2.Plan to make voluntary contributions

Channeling a bit extra into super can have a big effect on retirement spending money. 

Consider putting together a budget to work out how much you plan to save and spend in 2022. Cutting out little luxuries, like takeaway coffees and lunches or having a “dry” (alcohol-free) month, may free up some extra cash for long-term goals. 

At the same time, you may consider asking your employer to sacrifice a portion of your salary toward your super. Salary sacrifice allows you to put a certain amount of your pre-tax pay into super. This can have tax benefits, as it can reduce your taxable income for the year. Don’t forget that super is taxed at 15 percent, which is much less than 32.5 cents in the dollar paid on the average income.

3.Boost your super with your tax return

Speaking of tax, another good way to get that compound interest working for you is to deposit your tax return into your super.

While you’ll have to wait a few months before making a contribution for the 2022-23 financial year, early planning will mean your account gets a mid-year boost without causing pain to the hip pocket. 

4.Review your super

Getting into the habit of doing a regular super health check can pay dividends when it comes to retirement. 

Every six months you’ll receive member statements which set out your balance, investment returns and contribution history. The start of Lunar New Year is a great time to review those statements to make sure you’re on track to meet your goals.

You can always make adjustments if something isn’t right or doesn’t match your objectives. For example, you can change to a more conservative or aggressive investment strategy depending on your life stage and plans. 

5.Find lost super and consolidate funds

Many of us have moved jobs over the years or have been involved in casual work. As a result, many Australians have multiple super funds and each fund will change a separate set of fees, which means your retirement balance may be eroded if you have more than one account. By consolidating your super, you can potentially reduce the amount you pay in fees. 

The good news is it’s easy to check on how many funds you have through MyGov. You can also use the Active Super website to consolidate your super. 

Similarly, you can check if you have any lost or unclaimed super through the ATO website. Lost or unclaimed super can be recovered and put towards your retirement balance. 





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