Need to rebuild your super or retirement savings after COVID-19? There are plenty of strategies you can use to make up some lost ground. And it doesn't have to be because of COVID-19 either.
At any stage in your life, your retirement savings could need rebuilding because:
- You've taken time out of the workforce to raise children
- You've taken some of your income stream as a lump sum
- You've gone travelling for an extended time
- Market volatility has caused a drop in the value of your investment
- You've had to dip into your super due to financial hardship
- You withdrew super from your account during COVID-19 via the Federal Government's Early Release scheme
To give you some idea of how much super you should have based on your age, try this nifty calculator.
Quick-win strategies to rebuild your retirement savings
A dip in your account balance doesn’t have to be permanent. There's always at least one strategy you can follow to help you rebuild.
In fact you’ve probably come across many useful rebuilding strategies but never thought – or needed – to adopt them before. They're tried and true strategies that work for people like you. People who are trying to grow their investment to live comfortably in retirement.
If you're still working and have a SUPER account:
STRATEGY 1: Combine all your super accounts into one
If you never got around to doing this, now's a good time to combine your super accounts. In fact, any time is a good time to do this. With your super in the one place, you’ll pay only one set of fees, which means you'll keep more of your savings. It's a good idea to check if you have insurance or services with your other fund before you combine accounts. Find out more.
STRATEGY 2: Explore the option of salary sacrificing
Salary sacrifice is an arrangement between an employee and an employer. The employee agrees to sacrifice some of their salary and have it paid to something else, such as super. In the case of super, the sacrificed amount goes into an employee's super account before tax has been taken out. As well as helping you grow your super savings, this arrangement can have tax advantages. Read our Fact Sheet.
STRATEGY 3: Add whatever you can to your super
Contributing to your super is arguably the quickest and most direct way to build your super. You can make a lump sum contribution to your super at any time as long as you keep within the contribution limits. That includes any amount you withdrew via Early Release and haven't used. You can also make small contributions over a period of time. If you're a low-income earner, your contributions to super may then make you eligible for a co-contribution from the Government when you submit your 2020/21 tax return. Learn about contribution limits and other ways to contribute to your super.
STRATEGY 4: Take a close look at what options your super is invested in
Being in an investment option that's not right for your age and stage in life could cost you in lost savings over time. Remember: the timeframe for a super investment could be 40 years or more. Imagine the rebuilding potential of 40 years of compounding interest! If you're a member of Energy Super, you can have a discussion with one of our phone-based financial advisers at no additional cost to you. You can book an appointment below.
If you're retired and have an INCOME STREAM account:
STRATEGY 1: Consider setting your pension drawdown option to Cash
Having Cash as the investment option from which you withdraw your income stream payments can make a lot of sense. It means you don't have to sell your assets during times of market volatility. It's a good idea to talk to us first so we can help you do this most effectively.
STRATEGY 2: Pause your auto-rebalancing during times of market volatility
Any switching or selling of your assets between investment options will realise your loss in a period of market volatility. That's why pausing the auto-rebalancing option on your account could be a good idea in those times. We can talk you through this idea. Contact us.
STRATEGY 3: Review your eligibilty for Government assistance
Take the time to see what Government assistance might be available. This includes the Age Pension. You might also be entitled to other benefits that can help reduce your expenses.
STRATEGY 4: Reduce your pension drawdown amount
If you're withdrawing above the minimum drawdown amount, you can always reduce it. The Federal Government temporarily halved the drawdown amount on 22 March 2020 in response to COVID-19. The temporary measure will continue for the 2020/21 financial year. If you haven't reviewed your retirement strategy in a while, contact us. One of our financial advisers can help make sure you're on the right track.
Support and advice to rebuild your retirement savings
Consider attending one of our popular webinars
Our webinar series runs throughout the year on a range of topics. A financial adviser or specialist is always there to help answer your questions. Our September and October webinars are all about protecting your income stream investment and rebuilding your super. Find out more and register.
Talk to us
Contact us to find out more about how you can rebuild your retirement savings. Depending on the complexity of your situation, you can also get phone-based advice on your Energy Super account at no additional cost to you.
If you're looking for more comprehensive advice, our dedicated team of experienced financial advisers can help. The team has been providing financial advice to clients for over 10 years. Energy Super’s financial advisory service is provided by ESI Financial Services (ESIFS), a wholly owned subsidiary of Energy Super.
Book an appointment now