Superannuation is a powerful investment vehicle that will help you accumulate wealth during your working life to support your lifestyle in retirement. Furthermore, it will be one of the biggest financial assets that you will ever own in your lifetime…in most instances, second only to your family home.
Although it rarely sits idle (i.e. via Superannuation Guarantee contributions and investment returns ticking along in the background year after year, compounding), its true potential is often not realised until you actively engage with it on a personal level.
What we mean by this is, spending the time:
1. Breaking down any mental barriers (i.e. misconceptions and mistruths), and finding a way to connect with superannuation in a meaningful and productive manner, and
2. Gaining an understanding and appreciation of the benefits and purpose of superannuation according to your own financial situation, goals and objectives, and
3. Implementing an appropriate plan to harness many of superannuation’s specifics (e.g. investments, insurances, contributions, tax treatment, beneficiaries etc.) for you, and
4. Reviewing your plan on an ongoing basis, and making adjustments where applicable, so that it continues to be aligned with your financial situation, goals and objectives now and into the future.
Despite above, for some of us, we often only engage with our superannuation upon receipt of our electronic or paper-based annual statement – and even then, this may be a passing glance before filing it away next to last year’s statement.
Recent research* sought to understand how superannuation fund members currently engage with superannuation, how they think and feel about it, and what would prompt them to become more engaged moving forward.
Importantly, the findings from the research have provided some useful insights. We have listed some of them below, which may be especially of interest if you are currently feeling a little unengaged with your superannuation:
|Title||The Driver||The Passenger||The Backseat||The Boot|
|Tagline||Engaged & in control||Unengaged, but curious||Unengaged & happy||Unengaged & avoiding|
Knows the direction they are travelling, and the destination they are headed towards.
Aware of the direction the car is going, interested in knowing more and even keen on learning how to drive. However, just not sure how to get in the driving seat.
Aware of the direction.
Happy to let someone else drive, no urgency to get in the front seat. They know the car is moving, but don’t have any interest in driving it. They don’t want to think about where they are going or how they will get there.
Putting it off.
Totally in the dark and want to stay there. No idea what is happening and have no interest in knowing.
Doesn’t want to know.
|Continuum||← ← ←||← ← ←||← ← ←||← ← ←|
Have started to or do make voluntary contributions.
Don’t make voluntary/additional contributions.
Have multiple superannuation accounts.
Haven’t consolidated multiple superannuation accounts.
Unlikely to know their total superannuation balance.
Not yet identified the amount needed to retire.
^ Please note: Before rolling one superannuation balance into another, it’s important to understand that in some instances it may make sense to retain multiple superannuation accounts, for example, for personal insurance reasons.
Importantly, whilst changing the frames of reference of superannuation predominantly resides with superannuation funds, regulatory bodies and the Government, the examples listed above may strike a tune and help spark something in those of us that are feeling a little unengaged right now – if that is the case then please reach out to us as we are here to help.
This article is not meant to be condescending to those of us that are unengaged. Rather it aims to be informative with regards to the fact that some of us do find it difficult to engage with superannuation for one reason or another.
It also serves to highlight that given the importance of superannuation, if you are currently feeling a little unengaged it’s vital to recognise why this is might be the case and seek to find a meaningful connection so that you release the true potential of superannuation for your own benefit now and into the future.
Importantly, we can help point you in the right direction with an appropriately designed roadmap aligned with your financial situation, goals and objectives, and provide you with a helping hand along the way, but at the end of the day the fate of your superannuation (and your personal financial empowerment) ultimately rests with you.
With this in mind, as a superannuation fund member, you’ll be receiving your annual superannuation statement soon (if not already) either electronically or through the mail. Take some time to review and connect with your statement and please contact us if you have any questions regarding your statement or how you are tracking towards your financial goals and objectives.
*Choice. (2016). Project Superpower.