Many people struggle to keep on top of their personal finances, but one trend in particular could leave Australians “poorer” as they head towards old age.
Research has shown almost half of Australians have never sought advice about retirement, according to the Association of Superannuation Funds of Australia (ASFA), with the trend “worrying” experts.
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“Many Australians face challenges keeping on top of their personal finances,” ASFA CEO Mary Delahunty told 7NEWS.com.au.
“Being time poor and needing to consider complex financial information makes it difficult for people to engage with their overall financial situation, not only their super, but also other key financial decisions around mortgages, credit cards or insurance.”
Delahunty said ASFA’s research showing only half of all Australians sought advice on retirement was “worrying”.
“With so many options for investments, fees, and insurance within super, it can feel overwhelming.
“This is especially true for younger Australians who often think they have plenty of time to figure it out later.”
Other studies also show millions of Australians are failing to monitor the performance of their superannuation, with only one in 10 people aware of how their super fund performed over the past 12 months, according to financial comparison site Finder.
Personal finance expert Sarah Megginson said people needed to engage more with their retirement savings to achieve better results, with the cost of retirement rising by almost 4 per cent in the last year.
“Your superannuation is a valuable asset, so it’s worth investing the time to understand it,” she said.
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The research also found that men were three times more likely than women to monitor their super fund’s performance over a 12-month period.
Megginson said this was likely because women often faced “unique challenges” when it came to retirement savings, including time taken off work for family-related reasons and lower average earnings compared to men.
Of those who regularly monitored their super’s status, research indicated that most were pleased with the performance of their fund over the past year.
The Australian Tax Office (ATO) last week revealed there was $17.8 billion in lost and unclaimed superannuation in Australia in 7.1 million accounts.
People who have changed their name, job or super fund, may have lost super, with the ATO noting that finding even a small amount of lost super could make a big difference to the final balance at retirement.
Delahunty said the best advice for Australians wanting to better understand and manage their superannuation was to take “simple steps”:
- Check your super online and take note of you have and what you might need to retire on.
- Keep your details up to date and nominate a beneficiary.
- Check your accounts regularly and monitor to make sure you’re not missing any super payments you may be entitled to.
- Seek financial advice — getting good advice early can make a huge difference to your retirement.
“Superannuation is designed to provide long-term financial security in retirement, but it’s important for Australians to take ownership of their super early,” Delahunty said.
“Interestingly, it might be one of the only financial assets that people build in their name only.
“Unlike a bank account which you might share with others, or a house you might buy with a partner, super has a great role to play in personal financial resilience — show it some love!”