Olympics, super and your couch

The Olympics are over, you can get off the couch and finally get some sleep. But four yearly armchair expertise aside, don't ignore your super. It can actually be pretty simple.
Image: © diego cervo - Fotolia.com

The Olympics is an interesting armchair spectator sport in a philosophical sense. Every four years, for two weeks, we all become experts in sports we know absolutely nothing about.

“Oooh, bad rotation.” “Great double pike with twist!” “Lift your stroke rate girls”. But the Olympics is for all ages.

Four years ago, when the Beijing Olympics started, I had something else on my mind. After 20 or so hours of labour, DebtGirl joined us half-way through the opening ceremony, at 8.47pm on 08/08/08.

Any more 8s and she’d have gained automatic Chinese citizenship. (The maternity ward was filled with Chinese-Australians who’d booked caesarean births for that “lucky” day.)

The next two weeks were a blur of sleep deprivation. If someone had have said Dawn Fraser was making a comeback, I might have found a bookie to take a bet on her winning gold.

I didn’t care about Beijing. Shame, apparently it was pretty good. More importantly, it was in our time zone.

At some life stages, there are things you don’t care about.

Tax? Two days a year. The day you see your accountant. And two weeks later, when the cheque arrives.

Mortgage? Every few years when interest rates rise and your bastard bank passes on more than your neighbour’s bastard bank.

High on the “couldn’t give a toss” list for anyone under 45 tends to be superannuation. Access to it is a gazillion years away. And it’s hardly a sum that’s worthwhile before then.

But, like our four-yearly reminder to swot up on sports such as badminton, European handball and synchronised swimming, Australians need a regular reminder to investigate their super funds.

It doesn’t have to be every year if you’re under 50. And, if you’re struggling to get enthused, see a financial adviser, who will hopefully help you with the following.

From 20

Your super doesn’t need to be adjusted ever year. There isn’t much to adjust. You think you’re “diversified” because you have six super funds. But that’s simply laziness.

Check your super funds’ fees. Do a “risk profile” test and invest your super a little bit more aggressively than that.

If you have a relationship, kids, a McMansion with monster mortgage, get enough insurance so you don’t leave someone with a financial disaster if you do a Bon Scott on a weekend away with your mates.

From 30

Life’s beginning to get serious. Salaries are jumping rapidly. The super balance still ain’t much. The mortgage is big and a couple of babies followed you home from hospital.

It’s critical to invest your super properly. Even more importantly, get your insurances in order.

Two kids + spouse + mortgage + upcoming school fees = one enormous disaster if you suddenly drop dead. Potentially even worse is if you have a horrific accident, don’t cark it, but can’t work anymore. (However, income protection insurance is best done outside super.)

From 40

If you’re not taking super seriously from now, you’re missing the big decade. Tens of thousands of dollars are at stake.

Your income will be at its highest this decade. You need to start salary sacrificing extra. And if you’re not insured to the hilt to cover your loved ones, it’s negligence. If you die, they’re in serious trouble. And you’ll be in hell, where the superannuation fairies will send you, crying that your kids got kicked out of their home, and their school, when you died.

Stay aggressively invested for now.

From 50

The holy grail of a super pension is near (between 55 and 60, depending on when you were born). Overnight, your super became something. It’s your biggest asset outside your home.

Dial down the investment risk a little. You probably still need insurance, depending on your kids’ ages and the quantum of your mortgage.

Super is now about tax. Salary sacrifice as much as makes sense. Consider turning on a transition-to-retirement pension when you hit your super preservation age.

From 60

Super is now ready for boarding. Even if you don’t want to slow down, take your tax-free pension and recycle money back into super (via both transition to retirement and salary sacrifice strategies).

Most importantly, at any age, don’t ignore your super if you don’t care. Even if it’s once every four years, and you can’t drag yourself off your couch to do it yourself, book in to see someone who gives a toss about these things.

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Bruce Brammall is the author of Debt Man Walking (www.debtman.com.au) and a licensed financial adviser. bruce@debtman.com.au.