BUMPER returns on retirement savings have delivered double-digit growth for fund members but making slight tweaks to accounts can also help add thousands of dollars to your balance.

The average balanced super fund is expected to fatten by about 13 per cent in the 2013-14 year and bring home double-digit returns for members for the second consecutive financial year.

But experts say that taking a fresh look at super can help to better prepare you for life after work.

Accountant firm Deloitte’s report Adequacy and the Australian Superannuation System says at the age of 65 males without a mortgage need $610,000 to live a comfortably and females need $680,000.

But as we live longer, we need to tuck more away into the retirement kitty.

Here are five key steps you can take to get started.

STEP 1 - Your starting point

Check your most recent superannuation statement or log on to your fund’s website and find out where you stand.

What’s your balance? Do you have insurance? Have you supplied your fund with your tax file number, and what investment option are you in?

Once you do a basic audit of your existing situation, you can then look for areas that need improvement or tweaking, Australian Institute of Superannuation Trustees chief executive Tom Garcia says.

“Super funds have stacks of easy to digest information on their websites, from videos to infographics,’’ Garcia says.

Many funds also include retirement calculators on their websites. These estimate how much you will have at retirement based on your current savings rate.

Alternatively, the government’s MoneySmart website also has detailed information about how super funds work, tips on saving and how to work out how much you need in retirement.

STEP 2 - Type of fund

There are several types of funds — find out which one you are in.

Is it not-for-profit, including industry funds, a retail fund (which makes a profit for its manager), a corporate or government fund, an employer fund or a self-managed fund?

Most employees have a choice of what fund they want to belong to. However, if you have been placed in a fund without choosing it (a default fund), or if you are thinking of changing fund, take the time to look at the main type of funds and their performance records.

You can compare different types of funds for free through independent research company SuperRatings, which compares performances across different types of funds and also drills down to individual funds and investment options.

Chief executive officer of SuperRatings Adam Gee warns that past performance is not an indication of future profits. However it will give you an idea of consistent performers, especially if you compare longer periods of five or 10 years.

According to SuperRatings, not for profit funds historically charge lower fees and have produced higher returns.

There is also a new type of fund, known as MySuper. These funds can be offered by any fund manager, not for profit, employer and retail fund managers, and all have the same features of lower fees and a simpler list of services.

MySuper funds are soon to be the automatic “default” fund for new employees.

STEP 3 - Fees

Working out how much your fund’s fees are is not as easy as just reading your statement, says Deakin University’s senior lecturer in financial planning and superannuation Adrian Raftery.

The statement will often show administration fees but many do not clearly identify management and investment fees. These are often only included in the fine print.

Add these costs to your administration costs to work out the total fees.

“All of these separate fees look small individually but collectively they could be costing you a small fortune,’’ Raftery says.

SuperRatings says the average fee on a $50,000 balance for a not-for-profit fund last year was 1.03 per cent, retail funds charged 1.77 per cent and public sector funds charged 0.86 per cent.

To calculate your fee percentage, divide the total fees by your balance, then multiply by 100. For example, $1700 fees divided by a $150,000 balance equals 0.0113. Multiplied by 100 it is 1.13 per cent. Decide if this is value for money, compared with the type of fund and its investment options.

STEP 4 - Investments and Insurance

Each fund offers several investment options. Risky ones are supposed to make bigger profits, conservative options make smaller, more steady profits, and there are various combination options.

The most popular option is “balanced”, which typically has about 70 per cent risky assets and 30 per cent conservative.

Generally the younger you are the more risk you can take. Those in retirement often choose to be more conservative.

It is cheaper to pay for life and disability insurance through a super fund than outside super. However, Gee warns that super funds are starting to increase insurance premiums, with some showing price jumps of more than 50 per cent in the past year. Check your cover to make sure it still meets your needs.

STEP 5 - Contributions

Most people will only have compulsory employer contributions going in to their super. But for most, this will not be enough for retirement.

Making extra contributions from your pre-tax pay of even $20 a week will reduce your taxable income and can mean more than $75,000 extra at retirement over a working life.

Article originally published here in Herald Sun on 7 July 2014.