The superannuation fund is much more important than the majority of people treat it. It is natural to tend to neglect that which is far off in the future. However, the further away your retirement is, the more effective small changes and improvements will be – they have more time to accumulate. A few simple changes to your superannuation arrangements could significantly raise your standard of living come retirement, so it is imperative to stop putting it off and optimise your superannuation!

Combine Your Funds Into A Single Account

Many people have two or more super funds in their name. If you've worked more than two jobs in your life, chances are you fall into this category. Combining all your funds, commonly referred to as consolidating your super, could potentially be the single most effective step you take towards maximising your retirement fund.

To put it bluntly, having multiple funds is the equivalent of throwing money away, as each super account comes with its own fees. Furthermore, multiple accounts are inherently more difficult to keep track of, requiring more time to maintain and increasing stress levels.

Find which super fund is best for your purposes (taking into account current super balance, income projections, etc.) and move your entire super balance into that fund. While there may be certain hassles (and even termination fees) associated with closing an account, the long-term benefits will be more than worth it.

Salary Sacrifice

Salary sacrifice is a fantastic way to get more benefits out of your super. Essentially, you 'sacrifice' a portion of your before-tax salary to supplement your super. There are two big advantages associated with this:

1. Pay less taxes. By reducing your before-tax salary, you ultimately pay less annual tax. While your take-home pay will be lower, your net wealth increase (super contribution + take-home pay) will be greater than it would be without salary sacrifice.

2. Larger super fund. Due to a multitude of reasons, particularly a projected increase in average lifespan, experts are agreeing that the super funds of current employed generations will need to be quite a bit larger than they previously expected. Salary sacrifice could be the perfect way to add an extra chunk to your current super contributions.

Take Action Now!

Chances are, your projected retirement is anywhere from 2 to 5 decades away. Due to this, it's all too easy to fall into the trap of thinking that you have plenty of time to sort out your super. The fact is, the sooner you make the necessary changes to optimise your super fund, the greater the ultimate effect will be – a small change becomes a big change when it's multiplied by 40 years.