Don’t Let Your Hard-Earned Super End Up in the Wrong Hands

Binding vs. Non-Binding Superannuation Beneficiaries

As a financial advisor, I’ve seen my fair share of superannuation surprises. Trust me, you don’t want your retirement savings going to your ex or family member you haven’t spoken to in years.

Let’s chat about how to make sure your super lands exactly where you want it when you’re no longer here to enjoy it.

Super 101: It’s Not Just for Retirement

Most of us think about super as our ticket to a comfy retirement—cocktails on the beach, anyone? 

But here’s something many people miss: your super also plays a big part in what happens to your money after you’re gone. It’s like setting up your financial legacy, and you’ve got more control than you might think.

Binding vs. Non-Binding: What’s the Deal?

When it comes to your super death benefits (yeah, not the cheeriest topic, but super important), you’ve got two main options: binding and non-binding nominations. Let’s break them down.

Binding Nominations: The “Do What I Say” Option

Think of a binding nomination as your super fund’s marching orders. You’re telling them, “When I’m gone, give my money to THESE people.” No ifs, ands or buts —your money goes exactly where you direct it.

Non-Binding Nominations: More of a Suggestion

A non-binding nomination is like leaving a note for your friend that says, “If you’re ever in town, you should visit that great coffee shop.” They might follow your suggestion, or they might choose a different place. Similarly, with a non-binding nomination, you’re expressing where you’d like your super to go, but ultimately, the fund’s trustees have the final say.

Why This Matters

Let me give you a couple of real-life scenarios:

Carl, a 40-year-old business owner, set up a binding nomination for his super to go to his wife, Emma. When John unexpectedly passed away last year, his $500K super went straight to Emma. No family feuds, no delays—just financial support when she needed it most.

Sarah, a 32-year-old designer, had a non-binding nomination suggesting her super go to her partner. She thought that was enough. Sadly, when Sarah passed, the fund split her $350K between her brother and parents.

So, Which One’s Best for You?

Good question! It’s not always black and white.

Binding: Great if you’re 100% sure where you want your money to go. It’s like locking in your decision. But heads up—you usually need to renew it every three years, and it needs witnesses. 

Non-Binding: Offers more flexibility. Life changes fast in your 30s and 40s—new relationships, kids, career shifts. A non-binding nomination lets the fund adapt if your situation changes. But there’s a risk they might not interpret your wishes the way you’d want.

Your Super, Your Call

Here are some tips on how to approach this.

  1. Think About Now and Later: Your super nomination should reflect your current life and potential changes. Just bought a house with your partner? Getting married soon? Kids in the picture? Factor it all in.

  2. Update, Update, Update: Whether binding or non-binding, revisit your nomination yearly. I usually tell clients to do it around tax time—you’re already in ‘finance mode.

  3. Consider Professional Help: Super rules can be as complex as trying to assemble IKEA furniture without the manual. A quick chat with your financial advisor or accountant can save you a ton of headaches.

Let’s Get Your Super Sorted

Remember, your super is more than just a retirement fund—it’s a big part of your financial legacy. Take control now, and you’ll be setting yourself (and your loved ones) up for a more secure future.

Let’s make sure your hard-earned money ends up exactly where you want it!

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Cheering you on!

 Certified Financial Planner®, Director

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Financial Advisor Geelong.


This is not tax advice. Your personal objectives, needs or financial situation have not been considered when preparing this information.

The information contained in this update has been provided as general advice only. The contents have been prepared without taking account of your personal objectives, financial situation or needs.

You should seek advice before making any decision regarding any information, strategies or products mentioned to consider whether that is appropriate to your own objectives, financial situation and needs.

Current as of 12th June 2024.

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