My annual super statement arrived in the mail last week.
And, unlike the one third of Australians who don't read their statements, I opened mine.
Finally, some good news.
Super funds had their best year in half a decade last financial year. Super invested in the default "balanced" option – the option you get when you make no active choice about how you want your money invested – grew by an average of 14.7 per cent.
This was the third best annual result since compulsory superannuation was introduced in 1992.
It's about time.
In recent years, since the global financial crisis dealt a body blow to retirement nest eggs, the most advisable way to read your super statement was with two hands over your eyes, stealing glimpses in between.
According to a recent survey by HSBC of 15 countries, Australians retirees were the hardest hit in the world. One in six working Aussies now believe they will never be able to fully retire. On average, we now expect to fully retire at 64 – five years longer in the workforce than the global average.
Of course, this is because more of our money is invested in shares (about 55 per cent) than is common overseas, where retirement saving plans are more heavily invested in cash or property.
Although it seems a distant memory, the Aussie sharemarket briefly touched 6800 in late 2007. By early 2009 it had halved to below 3300.
Shares have since recovered somewhat to be within sight of 5300 – regaining half of their losses.
The recovery means super has still returned a solid 6.5 per cent a year over the past decade, meaning $100,000 invested a decade ago is now worth around $190,000 today. You've doubled your money.
But of course, for the unlucky people who retired during the GFC and began drawing down their super, their losses remain very real. And those facing retirement in the next few years are stuck working longer than they hoped to retire with the same amount.
So where to now?
That's the $1.5 trillion dollar question.
The Fed’s decision last week to continue pumping money into the US economy means shares are off to a rocking start for 2013-14, up 12 per cent in just under three months.
Eventually, the US will have to turn the monetary taps off, but Ben Bernanke has made it clear he wants the world's biggest economy to be in full recovery mode by then.
Most analysts expect shares to consolidate their gains this year or go higher still.
At the moment, apart from opening your own self-managed fund, there’s not a lot you can do to avoid the sharemarket’s influence. But every super fund member should do two things when they get their statement this year.
First, make sure you know where your money is invested. Are you in the balanced option? Most people are. If you're younger, you could think about moving to a higher growth option. More of your money will be invested in shares, which, over the longer term, yield a higher return. If shares do take a turn for the worst, you'll have time to ride it out.
If, however, you are very close to retirement, the choice is harder. Perhaps you want to take a punt on the share market recovery. But perhaps you need to be more conservative. Either way, you need to know which option you are currently in.
Second, everyone should compare how their fund performed against the average.
The average balanced fund may have returned 14.7 per cent in 2012-13. But some funds returned a paltry 10 per cent, while others earned their members 20 per cent plus. And that can make a huge difference to your retirement funds.
So check your statement against these industry averages:
High growth - 20.4 per cent
Growth - 17.1 per cent
Balanced - 14.7 per cent
Australian shares - 21.1 per cent
International shares - 26.1 per cent
Property - 11.0 per cent
Fixed interest - 4.7 per cent
Cash - 2.9 per cent
Super funds make a good living extracting fees and charges from your hard earned cash. And we're all so lazy they can get away with it. We like to assume they are doing a good job.
But it is possible to be in a dud fund. One year of below-average performance is not necessarily an indication you should switch funds. But if you find your fund underperforms the market for several years you should be asking serious questions why.
Either way, you won't know until you look closely at the figures.
Jessica Irvine is News Corp Australia's economics editor. View more articles at www.jessicairvine.com.au.