Superannuation
Superannuation is one of the biggest investments you will make and it plays a big part in your future. However, not all superannuation funds are equal. Understanding your super may help you get the most out of your investment.
Superannuation is one of the biggest investments you will make and it plays a big part in your future. However, not all superannuation funds are equal. Understanding your super may help you get the most out of your investment.
Get greater awareness of where your money is being invested, how it is performing, and how to protect it.
Explore your current understanding of the different options for superannuation funds
Discover options that could help you make the most of your superannuation, and how you might be able to minimise the fees involved.
Read each question carefully and answer YES or NO as indicated.
| Do you know where your money is invested? | |
| Do you know how much money (if any) your super has returned in the last year? | |
| Are you aware of the fees you pay inside your super? | |
| Do you understand the differences between industry and retail funds? | |
| Do you understand what an SMSF is, including the benefits and costs? | |
| Do you know the differences between concessional and non-concessional contributions? | |
| Do know how much you can contribute to super without paying the highest marginal tax rate? | |
| Do you only have one super fund? | |
| Have you ever searched for unclaimed or lost super? | |
| Do you know how much insurance you have inside your super and what it covers? |
There are many benefits in becoming more actively involved in your superannuation fund. The following points may identify knowledge gaps and provide a starting point for futher reading and enquiries.
Take some time to develop awareness about where your money is being invested. The default option of your superannuation may not be in line with your risk preferences or your timeframe to retirement. A good first step is to log into your super fund and review what type of portfolio your money is currently invested in (e.g. high growth, balance, conservative). Different superannuation funds will have different classifications. However, the concept is the same.
Take some time to develop awareness about where your money is being invested. The default option of your superannuation may not be in line with your risk preferences or your timeframe to retirement. A good first step is to log into your super fund and review what type of portfolio your money is currently invested in (e.g. high growth, balance, conservative). Different superannuation funds will have different classifications. However, the concept is the same.
You may not be aware that all superannuation funds charge some type of management fee (sometimes known as MER). It may be a good idea to look at how many fees are charged as both a dollar amount and a percentage of the balance of your super.
Industry funds are funds to benefit their members, meaning that any profits made are put back into the fund (which can result in lower fees). Retail funds are owned by private financial institutions such as banks and insurance companies. They were developed to provide investment expertise and personal service to their clients, but these funds also charge a commission for service.
SMSF stands for Self-Managed Superannuation Fund. Self-Managed Superannuation is one of the four major varieties of superannuation. A self-managed fund gives the owner (otherwise known as the trustee) control and transparency over the investments and operation of the fund. However, the trustee also has greater responsibility in ensuring the fund remains compliant and is audited on an annual basis. Having said this, there are many SMSF services that promise to cover much of the administration. SMSFs often have a flat-fee structure which can be beneficial for you as you reach greater levels of retirement savings.
SMSF stands for Self-Managed Superannuation Fund. Self-Managed Superannuation is one of the four major varieties of superannuation. A self-managed fund gives the owner (otherwise known as the trustee) control and transparency over the investments and operation of the fund. However, the trustee also has greater responsibility in ensuring the fund remains compliant and is audited on an annual basis. Having said this, there are many SMSF services that promise to cover much of the administration. SMSFs often have a flat-fee structure which can be beneficial for you as you reach greater levels of retirement savings.
Changes to superannuation laws occur frequently and often affect what is known as concessional and non-concessional contributions. It's important to be aware of how much you can contribute without being taxed at the highest marginal rate. A discussion with your financial planner or accountant each year will help you stay informed.
It's not uncommon for people to open a new super account when they start a new job instead of taking their super fund with them when they change jobs. According to the Australian Taxation Office (ATO), 45 per cent of working Australians have more than one super account. Australians with multiple superannuation accounts could be paying thousands in unnecessary fees every year. The ATO is encouraging those with multiple accounts to consider consolidating their super into one preferred account.
The Australian Taxation Office (ATO) states that your super fund will report you as a lost member if: a) They have not been able to contact you OR; b) They have not received any contributions or rollover amounts for you in the last five years OR; c) Your account was transferred from another fund as a lost member account and no new address has been found. The good news is, the ATO maintains a register of reported lost members but the super fund still holds your monies. If you haven't already, see if you have lost super and consider rolling it over into a fund you actively manage. You can start your search by clicking here: https://www.ato.gov.au/Individuals/Super/Keeping-track-of-your-super/
Most retail and industry funds that an employer sets up for you will have some type of 'group cover' included. This could be for life insurance, total and permanent disability (TPD) insurance, or income protection. As the insurance provided is generic in nature, it will not take into account your personal needs or situation. Also, group cover is not underwritten - and, as such, the successful claim rates can be lower when compared to underwritten cover. If you have multiple funds, it's highly likely that your balance may be eroded by multiple sets of insurance premiums. It's important to note that even though you have multiple insurance policies, some do not allow you to claim from more than one insurer. Insurance can be complex and filled with hidden details. It's always a good idea to seek reliable information. Speaking with a licensed professional may help to reduce costs, improve your success in claiming, and ensure that you are covered for what you really need.
