8 Common Superannuation Mistakes Costing You A Fortune

8 Common Superannuation Mistakes to Avoid

Superannuation is one of the best tools for building wealth in Australia, but it's remarkably easy to get wrong. Small oversights early on can compound into massive losses over a 40-year working life. Here are the 8 most common mistakes we see:

1. Staying with Underperformers: Many Australians don't realize their fund is underperforming until it's too late. The difference between a top-tier fund and an average one can be hundreds of thousands of dollars by age 67.

2. The "Default" Trap: Default investment options are designed to be "safe" for everyone, which often means they aren't "optimal" for you. A 25-year-old in a default balanced option is likely missing out on growth, while a 64-year-old might be taking too much risk.

3. Ignoring Multiple Accounts: If you've had several jobs, you likely have several super funds. This means you're paying multiple sets of fees and insurance premiums, which can eat up a huge chunk of your contributions.

4. Premature SMSF Setup: A Self-Managed Super Fund (SMSF) can be fantastic, but only for the right person. If your balance is under $200,000, the compliance and audit costs often outweigh the benefits.

5. Relying Solely on the 12%: The Super Guarantee is a great foundation, but it may not be enough for a "comfortable" retirement. Even a small additional voluntary contribution made in your 30s can make a life-changing difference in your 60s.

6. Losing Insurance Coverage: Consolidating accounts is usually good, but people often forget to check their Life and TPD insurance first. If you have a pre-existing condition, you might not be able to get the same cover in a new fund.

7. Waiting Too Long for Advice: Seeking financial advice at age 60 is helpful, but seeking it at age 40 is powerful. The more time you have, the more "levers" you have to pull.

8. Panic Switching During Volatility: When the share market crashes, many people get spooked and switch their super to "Cash." This locks in the losses and means they miss the eventual recovery. A long-term strategy requires staying the course.

Source: https://www.fool.com.au/2025/11/13/8-common-superannuation-mistakes-costing-you-a-fortune/

For any further information regarding this article please call Humble Goode on (08) 7477 8252

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