When is the best time to start thinking about retirement?

Many factors are at play that influence how much your super will grow over time. Here’s a breakdown of the main ones.

Investment returns

This depends on your Risk Profile, Investment Strategy and Fund Choice. The choice is broad and highly competitive as every Fund is competing for your investment. Most Funds have a range of pre-diversified options using their own investment styles and catering for most risk profiles. Funds may also allow you to construct your own portfolio either under a short select list of options or allow a much broader, i.e. ‘shopping basket’ of investments. To generate the investment returns you will need, it is arguable as to who’s approach or whether their investment strategy is better. Funds or investment managers will attempt to lure you in on past performances. Investors need to be aware that past performance is not a reliable indicator of future performance. It’s future returns which are required but this is the unknown.

The time factor

That is, how long you are invested in the market? As mentioned, typically, there is ample time to ride out the downturns and lows in the market. As you get closer to retirement, seek advice on whether it’s time to scale back your Risk Profile. The decision to scale back will come down to your personal circumstances, goals, knowledge and experience with investing.

The super ‘Fund’ or ‘Product’ you have chosen

This will impact your administration fees and charges, your ability to access your preferred investment options and ultimately where you place your investments.

• Superannuation funds come under different structures e.g. Industry Super Funds, MasterTrusts, Wrap accounts or SMSF’s. There are also Government Superannuation Schemes and some are Untaxed Schemes’.
• Industry funds in general have low administration fees and some have ‘set and forget’ investment options where some of their performances are great as well.
• Whether you actually need the complexity of Wrap Platform may come down to personal preference, whether you are interested in greater investment choice or investment control through your adviser and place value in a tailored investment portfolio. Note: I am NOT saying that a greater investment choice will lead to higher investment returns. Nor am I claiming that you can’t get superior after-fee investment returns through a pre-blended standard diversified investment option under an Industry Super fund. My advice is to get ‘Independent’ advice on which Product best suits you.
• With a SMSF, your primary reason over retail super funds is all about investment control and having the ability to invest in certain investments which is not typically available on a Wrap platform, such as direct property. However, keep in mind that this additional complexity introduces costs as well as additional trustee responsibilities which need to be factored in.

Regular contributions

There are a lot of combinations on how this can be done. Prioritise Concessional Contributions and target whether a tax benefit can be gained for that contribution. If that doesn’t work then, look towards Non-Concessional Contributions.

There are limits on both Concessional Contributions (i.e. $30,000 pa for the 2025-2026 financial year) as well as Non-Concessional Contributions (i.e. $120,000 pa or $360,000 if eligible under the Bring Forward Provisions). However, there are also exceptions to the $30,000 Concessional Contributions Cap, such as being eligible to use any Unused Carry Forward Concessional Contributions from the previous 5 years. Such an exception can amount to a very large potential deduction, if it’s available – speak to your Financial Planner about this.
There are also other incentives such as the Government Co-Contribution or a Spouse Contributions Tax Offset. Other ways to get large sums of money into super also includes Downsizer contributions, if you have sold your family home, Personal Injury contributions or being able to use the Small Business CGT Concessions. Be sure that you speak to your Financial Planner about whether the conditions are met.

Managing insurance within your super

Lastly, be conscious of whether you have insurances under super and understand that your super balances are being eroded by premiums over time. Recognise that these insurances are not free and consider topping up your contributions to compensate. The aim is to reduce leakage from your super. Also, if you have income protection structured under your super and your cashflow can afford this, consider restructuring this policy in your own personal name so your super fund doesn’t bear the cost and claim the tax deduction in your tax return personally.

If you need a hand growing your super or would like to discuss any of these items further, speak to a licensed financial planner.

Disclaimer: Information presented is general in nature and hasn’t taken into account your personal circumstances. You should consider whether the strategies and investments are suitable for you by seeking personal advice from a licensed financial advisor. We do not accept any liability for any resulting loss or damage of the reader or any other person. Past performance is not a reliable guide to future returns.