I wonder how many Australians are 'superannuation savvy' when it comes to actually understanding what their super statement is saying!When helping my clients make sense of their super, I like to 'break things down', and explain the industry jargon into every day normal English people can understand.If your super statement is easier to understand, it might motivate you to take a deeper interest in your super. After all, super is your money, and so why not make the most of it now to enjoy a better lifestyle in retirement!Educating and empowering my clients on important financial matters is what I do as a financial adviser so I'd like to share my tips on 'How to make better sense of your super statement'?How to read and UNDERSTAND your super statement?What is a super statement?Your super statement is a summary report on what and how your super account has been travelling since your last statement. It shows:your super fund balance - how much you currently havehow your super money has performed - did it grow? by how much? or did it not grow?what fees did your super fund pay - fees can include management fees and insurance paymentswhat taxes were paid - shows any specific super taxes paidTop 20 Tips & Definitions of your Superannuation Statement1. Name & Mailing Address - It shows your name and your current mailing address.Tip #1: If you have moved, let your super fund know of the change ASAP.2. Account Number - It is a unique number that identifies your super fund.Tip #2: Handy to have this number when ringing your super fund for any enquiries.3. Your Fund Name - Believe it or not, most people do not know the name of their super fund!Tip #3: Next time you receive your super statement, get to know who your super money is with?4. Account Balance - What has come in and out. It gives you a snapshot of the changes in your account balance during the statement period.5. Investor TFN (Tax File Number) Held - This shows whether or not the super fund has your Tax File Number (TFN).Tip #4: You don't have to provide your TFN, but if you don't there are some taxation consequences, so check your statement on your TFN status.6. Investment Summary or Valuation - It shows how your current account balance and future super monies are invested.Tip #5: The way your super is invested now can make a big difference later in your retirement. Seeking advice from a trusted adviser on this important financial matter is highly recommended!7. Changes in Investment Value - Did your super investments achieve a growth or a decline? It shows the difference in the value of your super money over the statement period, which can be over a 6 month period or annually.8. Closing Account Balance - This amount represents what your super fund balance is after any deduction of fees, insurance premiums and changes in investment value.9. Long term performance of your options - This section highlights how the investment funds your super is invested in have performed over time. It can range from the start of the investment fund up to a 10 year period (if data is available).Tip #7: With so many investment options available as to how your super money is invested can get confusing. This is a great reason to have a chat with your trusted adviser to understand what options are most appropriate for YOUR situation.Everyone's situation is unique and different so you want personalised advice when it comes to your super.10. Preserved Benefit - It's the amount that (with some exceptions) must generally stay in superannuation until you retire from the workforce on or after your preservation age (between age 55 and 60 depending on your date of birth).How you invest your super now can potentially determine when you can retire or how comfortable your retirement may be!11. Restricted non-preserved - It's a restricted amount, which may be paid in cash (less any tax) when you stop working for your current employer.12. Unrestricted non-preserved - This amount can be paid to you at any time (less any tax, if applicable).13. Death Cover - This represents your your account balance and any insurance cover that may be paid to your beneficiary(s) if you die.Tip #8: Understanding what you are protected for, and the level of cover you have is an essential part of ensuring you have an appropriate 'safety net' to protect you in unexpected events. Talk to your trusted adviser to understand your situation.14. Total and Permanent Disablement (TPD) Cover - This shows your account balance and any insurance cover that may be paid to you in the event you satisfy TPD eligibility.Tip #9: If you are not sure about eligibility criteria's for TPD, or you simply need a hand in being assured you are appropriately protected, it's a good reminder to discuss it with your trusted adviser. Having peace of mind is better than assuming you'll be OK.15. Income Protection Cover or Salary Continuance - The amount shown is the monthly income (Insured Benefit) you may receive as a result of your inability to work due to an injury or an illness.Tip #10: Some income protection levels and the duration of the payment varies from fund to fund so it is crucial you understand your insured amount and how long the payment will continue for.If you are unable to work, and your income stops, how will you manage to repay your mortgage or continue with your lifestyle?16. Nominated Beneficiary(s) - This shows any person(s) you have nominated to receive your benefit if you die.a binding beneficiary (if you die, your money must be given to the person you choose, but you must have renominated your beneficiary every three years)a non-lapsing beneficiary (the same as a binding nomination except you don't need to renominate someone every three years)a non-binding beneficiary (the super fund's trustee will decide to whom your benefit should be paid. They must take your choice into account, but don't have to pay it to the person you nominated).18. Asset Allocation - This refers to the proportion of your money that's invested (or 'allocated') in each asset class. For example, you could have 100% of your money allocated to cash, or it could be divided among cash, fixed interest, property or shares.Tip #11: What is your risk tolerance? How well can you sleep at night? What kind of an investor are you? These are some of the questions you should be able to answer when it comes to knowing the asset allocation to apply to your super investment.Your trusted adviser can help you understand what type of an investor you are, and how to appropriately allocate your super money into the different investment assets.19. Condition of Release - Generally, your super money is locked away until you retire. Conditions of release spells out the circumstances in which you can get access to your super money. Apart from simply reaching your retirement age (usually 65), they include such things as being in severe financial hardship, becoming permanently incapacitated, or on compassionate grounds.20. Superannuation Trustee - All super funds are required by law to have a trustee, which is a semi-independent body appointed to ensure that your fund is being operated according to the best interests of all the members and according to superannuation law.So, when you next receive your super statement, I challenge you to actually read your statement, and see if you can make sense of it.Don't ignore it, or procrastinate on getting informed and empowered about your super. It is your money. Taking a keener interest in it now can mean a better financial future for you down the track.I am a financial planner and an Accredited Specialist Aged Care Adviser with Dome Financial Group (Dome Financial Group trading as Dome Financial Services Pty Ltd is An Authorised Representative of Financial Wisdom Limited ABN 70 006 646 108 AFSL 231138)If you would like help with your super please contact us on 1300 723 300 or visit our website at www.domefg.com.auFollow Dome Financial Group on LinkedInLike Dome Financial Group's Facebook PageThe information contained on this page is for discussion purposes only and is not intended to constitute financial product advice. It does not take into consideration any persons objectives, financial situation or needs. You should consider its appropriateness in light of your circumstances and consider seeking professional advice relevant to your individual before making a decision based on any information on this page.
