You can increase your super balance without making additional contributions

If you haven’t already, most of you will soon be receiving your annual super statements. Many people don’t look at them and in some cases they may not make a lot of sense. This year I challenge you to take five minutes and read through it. Even for someone that has just turned 50, these five minutes could add an extra $100,000 or more to your retirement balance.

Don’t look at your annual super statement as just another boring letter that I can file without reading. Instead look at it as a statement about how your retirement plans are going.

As a guide, these are the four things you should look at.

Fees and costs

They try and make this a bit confusing, as your statement will probably show at least four different types of fees. For the purposes of this exercise, all you need to look at are the three named “indirect costs of investment”, “other fees of your investment” and “administration fee.”

The first two are your investment fees. Together these should be no more than 0.8%. The investment fee percentage = investment fees ÷ closing super balance × 100. Note here that if your annual statement only covers the period from 1 January to 30 June, you will need to multiply the investment percentage by 2 to get the annual figure.

The last one is the administration fee. If your balance is greater than $50,000, this fee shouldn’t be any more than $200 per year.

What you want is to have the total of these two fees less than 1%. Any more than that and all you are doing is giving too much of your retirement savings to the super fund and its investment managers. If yours are higher than 1%, I recommend you look for an alternative.


How your super is invested is just as important as the fees. As a rule, if you are less than 50 you should have more of what they call growth assets. These are things like shares and property. Most default investment options usually have around 75% growth assets. Over the long term, moving this to 90% growth assets is likely to give you higher average returns and with it a higher retirement balance. Most super funds have higher growth investment options, and they make it easy to switch. If you are in a default or balanced investment option, consider the other investment options in your fund.


In most cases employers are required to contribute a minimum of 9.5%. However, just because the contributions are on your payslip does not mean it has been paid into your super. You should always check this.


Finally, there is the insurance. Insurance is the one thing most of us need, but at the same time we never want to use it. It is important that you have the right level of cover. If your insurance is too low, you and your family will be in financial trouble if something happens to you. Too high and your fees will be too high.

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About the Author
Phil Harvey is an independent financial adviser. In 2017 Phil set up his company Construct Wealth to help clients best manage their finances so they focus on what is important to them. He is a founding member of the Profession of Independent Financial Advisers and a tax financial adviser, registered with the Tax Practitioners Board.

General Advice Warning
This advice contains general information. It may not be suitable to you because it does not consider your personal circumstances. Phil Harvey and Construct Wealth are authorised representatives of Independent Financial Advisers Australia (AFSL 464629)