Why super new year's tips aren't all they're cracked up to be

When the new year rolls around, so do the superannuation suggestions, as regular as the countdown itself. But are these tips truly the fireworks they're made out to be? 

Let’s peel back the layers and see if what’s often presented as one-size-fits-all advice really holds up under scrutiny.

Common advice: Got multiple super accounts from different jobs? You've probably heard the advice to consolidate them to sidestep duplicate fees.

Why it might miss the mark: This tip comes with a cautionary tale about fees that might lead you to believe you’re hemorrhaging cash on duplications. In reality, while admin fees do add up, they’re not doubling your costs in the way some warnings suggest. Yes, you have a base fee on each account, but the major chunk of any super fund fee is typically a percentage of your balance, not a flat rate.

What to do instead: Rather than automatically consolidating accounts as a knee-jerk new year’s reaction, take a moment to assess what each account offers. Compare the performance, insurance provisions, and fee structures. Remember, each fund has different strengths, and while past performance doesn't predict future returns, it can give you an idea about how well a fund is managed. That’s when you should consolidate your accounts. Not some arbitrary date in January.

Common advice: There's a lot of chatter about pumping up your super contributions to speed up your retirement savings and grab those tax benefits.

Why it's not a one-size-fits-all: Upping your super contributions is indeed a savvy financial move – if it fits your budget. But let's not rush into it just because the calendar flips to January. It’s crucial to ensure it makes sense with your current financial picture.

A better approach: Sit down with your budget and figure out what’s feasible without stretching yourself too thin. If you’ve got the extra cash, putting more into your super is a smart play, but keep in mind it’s not the only way to invest. You want enough liquidity to manage your present while still planning effectively for your retirement.

Common advice: “Check the life insurance coverage” gets trotted out in almost every list of super tips, often treated as though it’s a major reason to choose or stick with a fund.

Why it’s not the main game: Insurance in super can be useful – you’re paying premiums from lower-taxed money, and group discounts can bring the cost down. But it’s not the core purpose of super, and treating it like a key factor can lead to confusion. Those premiums come out of your balance, and that means less money invested for your future, but more importantly, insurance is its own financial product. It needs to be assessed on its own terms, not lumped in as an inevitable part of your super.

What to do instead: If the insurance in your super fits your needs perfectly and the financial trade-offs work for you, that’s a win. But don’t let it steer your decision to join or stick with a fund. Focus on what your super is really for – growing your retirement savings. If insurance is a serious priority, compare the cover through super with standalone policies to make sure you’re getting what you need.

Super is personal, and making the right decisions takes more than following generic advice handed out at the start of the year. Whether it’s about contributions, insurance, or anything else, it’s important to weigh up what really fits your financial situation. Take the time to consider your priorities, assess the trade-offs, and make choices that actually support your retirement goals – not just tick off a list.