How to protect your Super

General advice warning:

The information in this update is of a general advice nature only and has been prepared without taking into account your personal objectives, financial situation or needs. Because of that, you should, before acting on the advice, consider the appropriateness of the advice, having regard to those things.

Protect your super – what to watch out for:

Today, we’re diving into the world of superannuation and how to protect your hard-earned savings. For the purposes of putting together today’s content I conducted some research on some Government websites on this topic. While there’s a lot of generic information out there, I found that practical tips and tools are a bit scarce.

So, what’s the best advice?

First, learn how to find your superannuation on your MyGov login. It’s crucial to keep an eye on it regularly so you know what you have and where you have it.

And here’s the biggest top tip: DO NOT CHANGE YOUR SUPER JUST BECAUSE SOME RANDOM PERSON CALLS YOU AND SAYS IT’S A GOOD IDEA.

Now, you might be wondering (and I have been asked frequently), “how does this happen?” and “why would someone move their super just because someone on the phone said it’s a good idea?”.

Well, these callers are good at what they’re doing and they’re getting around the cold-calling rules by saying they’re from a marketing company. They might be promising low cost, personal advice and great returns to persuade the client to proceed. What we’ve found is that it is anything but the above and is often fraught with danger. The good news is that the government is now well aware of these tactics and is hopefully taking steps to stamp this out quickly in a bid to protect this asset.

Outside of the family home, your superannuation is the largest asset most people have so it is important to stay vigilant and take the personal responsibility to protect it.

Remember: Just because someone calls you and asks you about your super you do not need to talk to them or even answer them. Remember, if something seems too good to be true…it normally is!

We would recommend that you avoid the cold callers, marketing groups and if you’re concerned about your super then seek advice directly from a reputable, licenced financial adviser.

Helpful Websites:

Following is a very useful link to one of the Government sites on super and planning for retirement.

You would use this website because it helps you manage your superannuation and plan for retirement effectively. It’s designed for Australians who want to:

Track and consolidate super accounts to avoid lost funds.
Estimate retirement income using calculators and planning tools.
Learn strategies to grow super through contributions and government incentives.
Understand when and how to access super and the tax implications.
Get reliable advice and resources from trusted sources like ATO and Moneysmart.

In short, it’s a one-stop resource for retirement planning and super management.

https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/super-and-planning-for-retirement

Topics, tools and ideas included on this site are:

There is also the following APRA website with some additional helpful information. This website also provides guidance on managing your superannuation and planning for retirement. It’s helpful for:

Checking and consolidating your super accounts.
Estimating retirement income using calculators and tools.
Learning ways to grow your super through contributions and strategies.
Understanding when and how you can access your super.
Getting tax information on super benefits.
Finding professional advice and resources like webinars and financial services.

Essentially, it’s also a trusted source for Australians who want to prepare financially for retirement and make informed decisions about their super.

https://www.apra.gov.au/protecting-your-super-package-frequently-asked-questions

Can you access your super early?

The short answer is…it depends. It is important to know that there are very strict rules around when you can answer your super early and also very harsh penalties for breaching these rules.

We are seeing more frequently people calling or advertising saying that “did you know you can access your super early” and advertising some access reasons that may not be 100% legitimate. This is therefore another area to be cautious about and again seek appropriate, personalised advice to see whether you do actually qualify under the conditions of release rules for super.

The following ATO website has a link for some useful information on how you can access your super early if this is something that was a consideration for you:

https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/when-you-can-access-your-super-early

We would recommend taking caution when you hear these ads talking about accessing your superannuation earlier than when you’re actually allowed.

We would encourage you to avoid these ads that are enticing you to access your super sooner than planned. Remember, superannuation is designed for retirement. It’s the largest savings most people have, which is why it’s often targeted by various groups and the impacts of taking funds our early (not for legitimate reasons) can have long term impacts on your final balance at retirement.

It is interesting to note that the number of people applying to access their super for early release on compassionate grounds, particularly for dental services, has more than doubled in the last two years?

Now, you have to ask yourself, have our teeth changed that much in the last two years? Or do you think the marketing departments in the dental and related industries have found something new to focus on?

Following is some further information and statistics around super being released early.

Early super withdrawals surge past $1 billion as regulators sound alarm

Australians are withdrawing their superannuation early at record levels, prompting warnings from regulators about unethical practices, long-term financial harm and the growing misuse of the compassionate release scheme.

According to the Australian Taxation Office (ATO), superannuation can only be accessed early in very limited circumstances, such as for critical medical treatment, transport for medical care or to prevent home foreclosure. However, new data and reports from multiple agencies show a surge in applications that fall outside these legitimate purposes – many linked to non-essential medical or cosmetic procedures.

Warnings over misleading advice and unethical conduct

The ATO has issued a nationwide warning about misleading advice and unethical schemes encouraging Australians to extract their super for lifestyle or cosmetic treatments.

More than $1 billion withdrawn in a single year

Figures from the Sydney Morning Herald show that the number of individuals applying for compassionate release of super jumped from 39,000 in FY2019-20 to nearly 69,000 in FY2023-24, a rise of more than 75%. In addition, the value of approved withdrawals nearly doubled in that period, from $523 million to $1.04 billion.

Our tips for our listeners: Let your super be for retirement. Unless it’s truly an emergency on compassionate grounds, let it compound away for a long and happy retirement.

Coming up next month

What is going on in Aged Care?

Next month we will be joined by Aged Care specialist Belinda Veriton who will talk to this and looking and what has changed in the Aged Care space and what you need to know.

We also have the podcasts on this that will drop over the next month so look out for these.

Below is a summary on what we will cover next month:

Restorative Care programs. Here’s what you need to know:

Key Changes:

New Fee Structure:

You’ll pay a percentage of the cost of services based on the type of service and your financial situation (age pension status).
Clinical care (e.g., nursing) is fully funded by the Government, so you won’t pay for these services.
You’ll contribute more for everyday living services (e.g., cleaning, gardening) and less for independence services (e.g., personal care, transport).
Contributions are lowest for full pensioners, moderate for part pensioners, and highest for self-funded retirees.

Lifetime Cap:

Your total fees for home care and residential aged care are capped at $130,000 over your lifetime.

No Worse Off Principle:

If you’re already receiving a Home Care Package or are on the waiting list, you won’t pay more under the new system.

New Classification Levels:

There will be 8 levels of care, with higher budgets for those with greater needs. For example, the highest level will have an annual budget of $78,000 (up from $61,440 under the current system).

Shorter Waiting Times:

The Government aims to reduce waiting times for services to 3 months by 2027.

Quarterly Budgets:

Instead of an annual budget, you’ll receive a quarterly budget. Unspent funds can be carried over, but only up to $1,000 or 10% of the quarterly budget.