Had a Baby? Time to Review Your Super

When you’ve just had a baby, superannuation is probably the last thing on your mind. Between nappies, sleep deprivation, and learning how to fold a pram one-handed, reviewing your super feels about as urgent as reorganising the garage.

But here’s the thing: having kids changes what you need from your super in several important ways. A couple of hours now can make a significant difference to your family’s financial security — both today and decades from now. Here’s what to check.

Update your beneficiaries

This is the single most important thing to do, and it takes about 10 minutes.

Your super fund needs to know who should receive your super balance if you pass away. If you haven’t updated your beneficiaries since you had kids, your new child isn’t listed. Depending on how your nomination is set up, the money might not go where you expect.

There are two types of nominations. A binding nomination means your fund must pay your balance to the people you’ve named — no ambiguity, no disputes. A non-binding nomination means the fund’s trustee considers your wishes but decides who receives the money.

For most parents, binding is the way to go. Just be aware that binding nominations typically expire after three years — set a calendar reminder to renew. If you’re in a blended family, a quick chat with a financial adviser is worthwhile here.

Check your insurance within super

Most super funds automatically include some life insurance and sometimes income protection and TPD (total and permanent disability) cover. Now that you’ve got dependents, it’s worth checking:

• How much life cover do you have? Default cover is often between $100,000 and $300,000 — which sounds like a lot until you consider a mortgage, living expenses, and 18 years of raising a child. For most families, the default isn’t enough.
• Do you have income protection? Some super funds include it, many don’t. If you can’t work for six months, would your family cope?
• What are the terms? Super-held insurance tends to have shorter benefit periods and more basic terms than standalone policies. Check the Product Disclosure Statement (PDS) for your fund.

You can increase cover within super, take out a standalone policy, or hold a combination. The key takeaway: don’t assume your default super insurance is enough. Check the numbers and adjust if needed.

Consolidate multiple super accounts

The average Australian has had several jobs by the time they’re in their 30s, and plenty of people end up with multiple super accounts without realising it. Each one charges fees — administration fees, insurance premiums, investment fees — and they add up.

Having three super accounts could easily mean paying $1,000+ a year in unnecessary duplicate fees. Over a career, that’s tens of thousands of dollars less at retirement.

You can find lost super accounts through myGov (linked to the ATO). Consolidating into one fund is usually straightforward — your chosen fund can often handle the rollover for you.

Before you consolidate, check two things:

1. Insurance. If one of your old funds has insurance cover, rolling it out might cancel that cover. Make sure you have replacement cover in place before you close the account.
2. Fees and performance. Roll into your best-performing, lowest-fee fund — not just the most recent one.

Think about contributions during parental leave

Parental leave often means a drop in super contributions, since your employer isn’t making compulsory payments while you’re off work. For the parent taking extended leave, this can create a real gap in retirement savings.

A few strategies to consider:

• Government co-contribution. If your income drops below $60,400, the government may match personal super contributions up to $500. Free money.
• Spouse contribution tax offset. If your partner earns less than $40,000 (including while on leave), you can contribute to their super and claim a tax offset of up to $540.
• Salary sacrifice when you return. Putting extra into super from pre-tax pay helps close the gap from time off.

These aren’t huge sums individually, but compounded over decades they make a meaningful difference — especially for the parent who takes the bulk of parental leave.

Review your investment options

You were probably defaulted into a “balanced” or “lifecycle” investment option when you joined your fund. If you’re in your 20s or 30s, you’ve got decades until retirement — which generally means you can afford a “growth” or “high growth” option that invests more heavily in shares and property. These are more volatile short-term but have historically delivered stronger returns over 20-30 years.

That said, the best investment option is the one you’ll stick with through market ups and downs. Most super funds let you change online in a few clicks.

A small investment of time with a big payoff

None of this takes long. An hour on a Saturday morning — while the baby naps, if you’re lucky — is enough to update your beneficiaries, check your insurance, consolidate old accounts, and review your investment option.

Your super is one of the biggest financial assets you’ll ever have. Now that you’ve got kids relying on you, making sure it’s set up properly is one of the smartest things you can do for your family’s future.