Here are 8 things you shouldn’t be doing with your super

If your dream is to start thinking about reducing your paid work hours over the next 5 to 10 years (or hanging up the work boots completely), it’s a good idea to make sure your focus is squarely on your super. Righting any wrongs now might put you in a much better spot for when that day comes that you can start to enjoy all your super savings.

Key learnings covered in this topic

  1. What not to do with you super
  2. How best to grow your super
  3. Financial advice available to you


Here’s the top 8 mistakes we’ve seen people make:

1. Focusing too closely on 1-year super returns at the expense of long-term returns

So, the annual super fund performance results start flooding your newsfeed. Is your fund among the top performers? If it’s not, don’t panic. While it’s great if your fund has come out on top over one year, what’s most important is to check it’s a top performer over longer-term periods, like 10 or 15 years. After all, super’s a long-term investment.

2. Changing your investment options when the market dips

POV: the market has dipped and everyone is in a panic. Since retirement might be getting a bit closer for you, you might be tempted to follow the herd and move your super to a less-risky investment option. But now might not be the best time to make the switch. Why? You risk locking in your losses and miss benefiting when the market (inevitably) rises again. Instead, it may be better to stick to your investment strategy and ride out the wave.

Another way of looking at a market dip is that your super contributions are buying assets at a discount. And when things improve, you’ll be rewarded as those assets will grow.

3. Choosing the wrong investment option for your circumstances

The above being said, if a market dip would keep you up at night – you might be in the wrong investment option for your risk appetite and personal circumstances.

4. Adopting too conservative an investment strategy too early

If you’re getting a bit closer to retirement, it may be prudent to consider moving to a more conservative investment strategy.

However, it’s important to balance the need for caution with the realisation that your super is likely to be invested for many years to come – even when you do reach retirement. You need your super to keep growing, so taking an appropriate amount of risk that you can bear is possibly a good move.

5. Missing the opportunity to make the most of compound returns

Ask many who’ve reached their golden years and they’ll say “I wish I paid more attention to my super sooner’.

The truth is, rising inflation means it’s never been more important for people approaching their later working years to maximise their super balance. More super, more income in retirement. The Association of Superannuation Funds of Australia (ASFA)’s most recent review of the amount of superannuation needed to live comfortably in retirement lifted to $70,482 per year for couples and $50,004 for singles.

The earlier you can start contributing that little bit extra, the longer your super contributions will benefit from the magic of compound interest. It’s never too early or late to maximise your super balance.

6. Living under a rock when it comes to understanding useful super strategies

The great thing about super is there are plenty of perks to encourage people to contribute extra. These include:

  • Carry forward rules
  • Bring forward rules
  • Downsizer contributions
  • Partner contribution opportunities.

Find out about these contribution strategies here.

It’s worth looking into these opportunities and seeing if they are relevant for your specific circumstances – such as your age, relationship status, savings and retirement goals – to get your balance in the best position possible for later.

7. Failing to re-evaluate your insurance needs every so often

Kids flown the coop? Relationship status changed? Paid off your home? Bought an investment property?

You might be living through some significant life changes right now, so it’s a good idea to make sure your insurance is aligned to your individual circumstances. Sometimes it might mean you don’t need as much insurance anymore – so more money stays invested in your super account for retirement. On the flipside, perhaps you need some extra insurance - to protect you and your loved ones if you pass away or can’t work anymore.

8. Delaying your move to TTR or pension

When you reach your preservation age, you could start a transition to retirement (TTR) strategy or pension account. While you might not be here quite yet, it’s worth being across the options so you can take advantage when you are. Yes, it will mean you draw down on some of your super each year, but you can also top up your super account and take advantage of tax savings that come from lowering your paid salary.


Let us help you right any super wrongs

If you’ve been making any of these super mistakes, there’s time to do something about it. You can get advice on making contributions, understanding what investment option is right for you and your insurance at no additional cost. We’re right here to help you if you need it– simply book a call-back to speak to a financial planner.^


*Financial advice obtained over the phone, or through MemberOnline, is provided by Mercer Financial Advice (Australia) Pty Ltd (MFAAPL) ABN 76 153 168 293, Australian Financial Services Licence #411766.
^Advice is provided by one of our financial planners who are Authorised Representatives of Industry Funds Services Limited (IFS). IFS is responsible for any advice given to you by its Authorised Representatives. Industry Fund Services Limited ABN 54 007 016 195 AFSL 232514.

Information correct as at 14 November 2023.