Superannuation (Super) is one of the most important assets you can have working for you.
Super is a compulsory long-term savings plan aimed at preparing you, your family in retirement. Super is YOUR money, a tax-effective investment vehicle that can be utilised through various strategies to ensure you have a Super Future. By law, an employer must pay 9.5% of your salary (super guarantee charge (SGC)) into your fund.
Your super fund is similar to a managed fund whereby your money is pooled with other members’ money and invested on your behalf, until such time as you meet a condition of release. Most funds offer a variety of investment options, these may include pre-mixed options that contain a mix of asset classes and/or single sector options such as cash, shares, and property.
“Its YOUR financial future, a great place to start is to understand where you are at today”
Important Things To Consider
- Consolidation: Is all your super consolidated under one fund? Multiple funds mean multiple fees and potentially multiple insurance premiums. By having all your super under one fund will put you on a stronger super path, save on admin fees, insurance premiums and potentially offer larger returns on your investment.
- Is this super fund the right fund for you: Every employer has to offer their employees a default super fund. If you don’t choose a separate fund to pay your super to, this is where it will all go. Around 80% of members are in their employer’s default fund — and for many, it could be the right choice. That’s especially the case now that the Government’s MySuper regulations have created a new breed of default super funds, with lower costs and standard insurance benefits. If you would like more control over how your money is invested, you might prefer a fund that offers more investment choice.
- Investment Options: Are you aware of what investment option your funds are invested in? If not allocated, your funds could be invested in a default fund option, possibly earning you lower investment returns. Note: Your investments should be invested in line with your Risk Profile. Once your investing in assets suited to your risk profile and personal goals will help you get more from your super. The default option is designed to suit the widest range of members, but it is best for you?
- Insurance: Do I have cover? What type of cover do I have? How much cover (is it enough), how much are you paying for the cover? What insurance options does my fund offer me?
- Competitive Fees: How much are you paying in admin, investment, insurance and advice fees? Checking how much you are paying and by making fund comparisons, you may save thousands.
- Fees v Performance: Whilst it is important to look out for a fund with lower fees, there is another part of the equation to consider!! The Bigger Picture??? – fund performance (return on investment) in comparison to fees? Although low fees are great if investment performance has been poor, will you not be worse off overall? Note: Past performance is not a reliable indication of the future performance of the fund. Fees are not everything, they are just a part of the whole picture, you can get a feel of how investments have tracked in the past in comparison with benchmarks and other funds.
By taking into account the above could be the difference of thousands of dollars at the point of your retirement.
Overall there are many super funds out there, in addition to thousands of investment options to choose from. By taking the above indicators into account as early as possible has the potential to significantly enhance your retirement savings. Super is YOUR money, giving you the power to make choices and ensure your money is working the hardest it can for you!!!
Speak to a professional or contact our office if you would like some assistance in mapping out the best possible super solution for you.
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