How to manage your super while you're not working

Unemployed, having a child or on a career break? If you’re away from work for a long period it’s crucial to pay attention to super.

February 28, 2023 by Byron Smith

KEY POINTS

Review what you're invested in and if it's still right for you.
Check you're not paying for insurance you’re not eligible for.
Speak with your partner about contribution splitting.
Make voluntary contributions if you can afford to.
Update your contact details with your fund.

Whether you’re unemployed, on parental or carer’s leave, or don’t expect super contributions for a lengthy period for another reason, fees, costs and premiums will continue to be deducted from your super. Over the long term they could erode or limit any investment gains.

"Being away from work is a good time for you to review your insurance cover in particular, as you don’t want to pay for insurance if you’re not eligible for benefits,” says smartMonday senior smartCoach Patrick Howard. “Also consider making this break from work a time to review your super, such as if you have the right investment strategy for your circumstances.”

Can you make contributions?

The best and simplest solution to limit the impact of fees and keep your super growing is to make your own voluntary contributions.

Understandably, if you’re not working and are not earning an income, this may not be possible. But even small, regular voluntary contributions can make a big difference in the long term.

"If you can make contributions from some income source or savings, you’ll reduce the impact of fees on your super, while adding to your account balance, helping it to grow while you’re away from work,” says Howard.

Also, your partner may be able to split their superannuation contributions with you. If they’re employed this can be done from their employer contributions through their super fund. They may also be able to make an after-tax spouse contribution to your smartMonday account, which can be organised through us.

Read our factsheet on contribution splitting [PDF]

Are you paying insurance for no reason?

If you’re unemployed you may not be eligible for income-protection insurance benefits. But if your fund doesn’t know you’re unemployed, the cost for that insurance will keep being deducted from your super account. In that case, you should contact your fund to discuss the matter.

If you’re on leave without pay, income protection cover in smartMonday remains valid for up to 24 months. For all funds, cover for death and total and permanent disablement remains in place unless your account is inactive for 16 months and you didn’t tell your fund you want to maintain the insurance.

"With these insurances, keep in mind that while you can cancel cover, if you reapply in future it could be more difficult to obtain depending on your occupation, age and health,” explains Howard.

Check your investment strategy

What your super is invested in will determine its performance. The best option for you is what balances your current circumstances and long-term goals.

"If you’re making no contributions, or they’re lower than normal, you might like to review your current investment strategy to ensure it's still the best pathway for you to reach your long-term goals,” says Howard.

If you’re unsure whether you’re in the right option, you may like to speak with your financial adviser. The smartMonday smartCoach team are also available to you at no extra charge, and ready to help you implement an investment strategy that is tailored to you.