A simple super oversight is costing Australians thousands of dollars in their retirement, according to research released today by MLC.
The latest MLC Wealth Sentiment Survey has revealed one in four Australians do not know their superannuation risk profile, which means they could be missing out on thousands of dollars in super.
Young women are particularly at risk, with 45 per cent admitting they do not know their risk profile. This is especially concerning given the average woman has 44 per cent less in super than a male of the same age[1].
MLC’s General Manager of Customer Experience, Super, Lara Bourguignon, said the findings suggest many Australians still have a ‘set and forget’ mentality when it comes to superannuation, and the key to improving their balance lies with stronger engagement.
“Being in the right super risk profile is one of the key factors that will determine how much you have when you retire, but it’s often overlooked.
“As an example of the difference it could make, a woman aged 25 on $80,000 a year in a conservative risk profile until she’s 70 could improve her super balance by around $294,000 if she adjusted her profile according to her circumstances and life stage,” Ms Bourguignon said.[2]
For this reason, MLC is encouraging Australians to use their Christmas break to check their super risk profile and see if it’s right for them.
“If there’s one thing every Australian can do right now to improve their retirement it’s to get in touch with their super fund and check what risk profile they are in, and, if it’s not right for them, to adjust it accordingly,” Ms Bourguignon said.
What is your super “risk profile”?
Your superannuation risk profile is used to identify where you sit on the investment risk-taking spectrum. It measures your risk tolerance to fluctuations in the value of your investment. Depending on whether you choose conservative, moderate or aggressive investments, you are likely to end up with different returns. What you prefer is individual and will depend on many factors such as your age, financial position, and timeframe for investing. Most Australians will also need to change their risk profile over their lifetimes.
How to check and fix your super risk profile
Checking your super risk profile and getting yourself into the right risk category is easy and takes around 10 minutes.
- If you have a financial adviser, they can assess your risk profile via a questionnaire; or
- Contact your super fund, which should be able to conduct an online questionnaire.
Other key findings from the Q2 2017 MLC Wealth Sentiment Survey
- Superannuation: 23 per cent of Australians don’t know what risk profile their superannuation is invested in, including 45 per cent of women aged 18-29
- Income: One in three Australians expect no change in income over the next few years, and 15 per cent expect it to fall
- Savings: 19 per cent of Australians have saved nothing in recent years; 26 per cent have only been able to save 1-5 per cent of their incomes
- Home ownership: While more than nine out of ten Australians aspire to own their own home, one in four does not think they will achieve it.
[1] WGEA 2016
[2] Figures calculated based on a woman working from 25-70 with an initial superannuation balance of $20,000
Download the Q2 MLC Wealth Sentiment Survey
Downloadable radio grabs from Lara Bourguignon, General Manager Customer Experience, Super, MLC
What a super risk profile is
What the MLC Q2 Wealth Sentiment Survey tell us about Australians’ knowledge of their super risk profile
What impact your super risk profile has
How to check your super risk profile
