Super's different strokes for different folks

The survey looked at the gap between the size of superannuation accounts at retirement and what was actually needed. Australians become less confident about bridging the gap the older they get: 51 per cent of baby boomers don't know how they will get by, compared with 38 per cent of the population.

Surveys such as this can be depressing, but I found some good news. In households with a thorough knowledge of their superannuation, 39 per cent were "very confident" it would deliver a decent retirement. Among those with "no idea" about their super, only 13 per cent were as confident. In other words, being informed is crucial to your outlook on retirement.

When it comes to superannuation, there are distinct phases: people in their teens and 20s who don't care people in their 30s and 40s who do care but are focused on career, mortgage and children and people in their 50s and 60s who are panicking about their retirement.

Let's start with the first group. Those new to the workforce don't think about retirement, but their decisions now will have ramifications 40 years later.

The law states your employer has to put 9 per cent of your wages into a complying super fund, so you start with the advantage of a developing nest egg with tax breaks.

You don't have a choice about super, so why not be informed?

Your employer must offer you the choice of where your super goes, so shop around the funds and see what's out there in terms of fees, insurance offers and performance.

Also, superannuation can accumulate in multiple funds if you have shifted employers. However, you earn better returns if you have all your superannuation in one place, so I suggest you roll it all into one super account.

You should put some extra in each month and select which accounts your super goes into. Your super fund has various allocations based on your risk profile, such as conservative, balanced, growth, international, property and so on. If you don't make a selection, the fund will select conservative or balanced - neither of which is ideal for someone in their 20s. When you are young, you should have your money in the more volatile yet higher-yield, shares-based funds. It gives you the best chance of having a large nest egg when you retire.

Then we have people in their 30s and 40s. This is a difficult group to interest in superannuation because all their earnings are going into mortgages and children. But these are also peak earning years - a period when income can be put away to be accessed later. In these years you should start with property and try to ensure that in retirement you own your own home.

Second, you should contribute more to your superannuation than the 9 per cent your employer puts in. Fifteen per cent of earnings is what most Australians should be putting in if they want to live in retirement as they lived in their earning years.

This is the kind of conversation you should have with an expert adviser, because with the complex interactions between tax, retirement savings and tax breaks, you can easily lose advantages that the law provides.

And don't forget the major asset you have now that you will not have when you are retired: your earning power.

You can protect your income generation with life insurance, income-protection insurance and total and permanent disability (TPD) insurance.

The third life stage - people in their 50s and 60s - is the simplest yet also the most complex.

By the time you are halfway through your 50s, there is some complexity in your life. Some have had time out of the workforce others have either gained or lost assets through the death of spouses, divorce and remarriage. These are often the years when you receive an inheritance, yet people also go backwards for medical reasons.

Start by knowing how much you'll need to live on. A target is useful.

Second, having your home paid off is a building block of a happy retirement. You either do this in your working years or you use your superannuation to pay out the mortgage.

Third, you must attend to your superannuation account and get the most from it. Unfortunately, the way the tax laws interact with superannuation, income and other investments, this is a complex field. Certainly, if you own a business, you need very specific advice, and if you are a trustee of a self-managed superannuation fund, you are legally required to be properly informed and to work from a documented investment strategy.

Superannuation is designed to allow you to be a self-funded retiree. But it has to work to your advantage, and that means taking advice.

Follow Mark on Twitter at @markbouris.