7 Super Tips

ACTIVITY

It’s one of the most important investments you’ll ever make, but how much attention do you really pay to your superannuation fund?

With the compulsory superannuation contribution rising from 9 per cent to 12 per cent over the next six years, it’s worth doing some research to ensure you are getting the biggest bang for your hard earned buck- after all, the choices you make today will radically affect the quality of life you are able to live in retirement.

Here are some easy tips to help you get savvy with super

1. Educate yourself

There are a wide range of websites designed to help you begin your superannuation education. The good ones are packed with information from the fundamental to the complex, and act as really convenient introductions on how to properly choosing your super fund. But beware- some of the sites are actually sponsored by superannuation companies, and won’t offer you impartial advice. Check out the “about us” section, or look at the ABN at the bottom of the page to find out more.

2. Let technology do the hard work

There are a few fund comparison businesses out there that charge for their service, but why not start off with a free check! Comparison businesses, like Canstar, help you see what your money will be doing should you decide to invest in the fund.

 3. Size and performance don’t always count

A big trap when comparing fund performance is not to compare like with like. Look at the performance of the fund’s portfolios, and try to understand the level of risks that might have made the fund so successful. When in doubt, ask questions.

4. Won’t use it? Don’t pay for it!

One of the fundamental differences between industry funds and retail funds is their levels of complexity. Industry funds have limited investment choices whereas retail funds can have many, and this really adds to the cost of the fund.

5. Do you actually need advice from a financial planner?

Most retail funds have financial planning advice built into their fees. But why pay for it if you want a simple investment product and are not interested in the assistance of a financial planner?

Many fund members want financial planning advice and many investment choices, but be aware that retail funds frequently cost twice as much as industry funds because of these factors.

6. Become a web-wiz

Before finally deciding on a fund, call up the websites on your shortlist. Do you feel comfortable with the sites? Are they easy to use? Do the sites provide quality, easy-to-read information about the basics of super?

7. Cover yourself

Super funds usually offer three main types of insurance:

  • Death only: This pays your nominated beneficiary a set amount upon your death. 
  • Death and total and permanent disability: Includes death only insurance, but gives you the option to claim should you be catastrophically injured or can’t work because of a disability.
  • Income protection (IP): If you can’t work because of injury or temporary disability, you can claim part of your lost salary while recovering.

Things to compare

What to look out for

Fees

The lower the fees, the more money in your pocket.

Investment options

Make sure the options their offer suit your needs.

Extra benefits

Your employer may contribute more than 9% to certain super funds or if you make extra contributions yourself.

Performance

Pick a fund that has done well over 5 years- not just the best performer last year.

Insurance

Examine the cover, your needs, and how much it will cost.

Service

Call them, check out their website, and look at any other services you may want.

 

 

 

 

 

 

Check these websites out for more information:

https://www.moneysmart.gov.au/superannuation-and-retirement

https://www.canstar.com.au/superannuation/

http://www.selectingsuper.com.au/