When was the last time you took a serious look at your superannuation account? If you're struggling to remember, you're firmly in the majority, and this financial habit could be quietly costing you a small fortune.
The Most Expensive Habit in Australia
In the latest episode of the 7NEWS Money Talks podcast powered by Vanguard, host Tim McMillan and Vanguard Australia managing director Daniel Shrimski have exposed what might be the country's most expensive habit – our tendency to 'set and forget' our retirement savings.
"It's like trying to run a marathon without knowing where the finish line is," Shrimski remarked, highlighting the lack of direction many Australians have regarding their retirement.
The statistics are sobering. Almost 50 per cent of Australians don't have a plan for retirement, despite superannuation being either their largest or second-largest asset.
A $4.3 Trillion System We Ignore
Australia's superannuation system now holds an astonishing $4.3 trillion – that's more than the total value of every house and apartment in Sydney and Melbourne combined. This colossal pool of retirement savings is projected to double again within the next decade.
Yet despite this money being intended to fund the final decades of our lives, most Australians treat their super like a subscription service they never use.
"You tick a box when you start a job, then ignore it for decades," McMillan observed. "That mindset can quietly cost you thousands in fees."
Shrimski identified the single biggest myth surrounding superannuation: the belief that it's all being taken care of automatically. "Yes, your employer puts money into a fund automatically, and that might have made sense when you first started working," he explained. "But 20, 30, 40 years later, that same setup might not suit you anymore."
The combination of default settings, underperforming funds and forgotten fees can add up to a massive difference in retirement savings. Many Australians could be unknowingly losing money simply because they don't engage with their super.
"It's complex, it's not front of mind, and people assume they'll worry about it when they're 60," Shrimski said. "But for most people, super is either their biggest or second-biggest asset. You have to treat it like that."
Five Steps to Superannuation Control
So how can everyday Australians take control of their super without becoming financial experts? Shrimski outlines five practical steps everyone can take to get their retirement savings back on track.
1. Create a Basic Plan
Your retirement plan doesn't need to be perfect, but it needs to exist. "Ask yourself how long you plan to work, what kind of retirement you want and what lifestyle you expect," Shrimski advised. "Even a basic plan gives direction."
2. Boost Your Financial Knowledge
Building your financial literacy pays dividends. "When people know how fees and investment options work, they make better choices," he noted.
3. Understand Australia's Retirement System
Surprisingly, only about 40 per cent of Australians know the current preservation age for super is 60. "It's your money – you should know when you can touch it," Shrimski emphasised.
4. Consider Voluntary Contributions
"If you can, top it up," Shrimski recommended. "Even small contributions compound over decades. It can make an enormous difference."
5. Regularly Engage With Your Fund
Make it a habit to log in twice a year to check your balance, investment performance, fees and insurance. When your annual statement arrives, take just 15 minutes to read it thoroughly.
"The ATO has a comparison tool that shows how your fund stacks up on fees and performance," Shrimski pointed out. "That's a great place to start."
It's Never Too Late to Start
Whether you're 20 or 60, what matters is that you start paying attention now. "Being disengaged is not the answer," Shrimski stated. "As you do more, confidence grows. You don't need to check it every day, just enough to know your money's working for you."
And for those who wish they'd started earlier? Don't dwell on past inaction. "It's never too late to take ownership of your super," Shrimski reassured. "It's an investment – and it deserves your attention."
The Money Talks podcast, hosted by Tim McMillan and powered by Vanguard, cuts through financial confusion to help Australians take control of their money – from investing and super to saving and retirement. Each episode features leading personal finance experts sharing practical insights to help build lasting financial freedom.
