Whether you’re picking your first super fund or wanting to switch, it’s easy to get confused about super. Here’s some simple tips for choosing a super fund that works hard for your financial goals.
What is superannuation?
Superannuation (or super) is money that’s put aside and saved while you’re working, so that when it comes time to retire you’ve built up sufficient money to not only get you through your golden years but to really enjoy them. To put it simply, superannuation is a savings structure with tax incentives to encourage long term savings.
Finding the right super fund can be complex. There are hundreds of funds to choose from, all with varying products and investment options. So where should you begin?
1. Review your current super fund
Most of us would have signed up to our superannuation fund when we got our first job, and it was likely a fund that our employer recommended. If you’re still with that same fund (or you’ve been with the same fund for a while), it’s worthwhile reviewing that fund to see if it’s working hard enough for your goals and needs.
2. Research, research, research
There are hundreds of super funds, all with various fees and products. Compare different funds for performance, fees, risk and service. Super is a lifetime investment, so when you’re doing your research it’s important to have a long-term view.
3. Consider a self-managed super fund (SMSF)
A SMSF is a family superannuation fund structure that provides benefits to its members upon retirement. So, what’s the difference between a SMSF and a normal superannuation fund? Members of a SMSF are also the trustees of the fund, meaning that they have more control over tailoring their fund to meet individual needs. A SMSF can also be beneficial if you’re estate planning and decide to do a Bloodline Trust.
A SMSF can have up to four members and can be made up of either friends or family. All members of a SMSF are responsible for the fund’s investments and insurance. While having control of your own super can seem appealing to some, it can entail a substantial amount of work, knowledge and usually requires professional support and guidance, especially with laws around superannuation.
4. Consult a financial planner
Managing superannuation is difficult, even with some financial knowledge. That’s where a financial planner comes in. A financial planner will be able to explain the different strategies relevant to you and your goals, the level of risk involved with each option and also the potential returns you can expect to receive.
Dulwich Group Financial Services Pty Ltd T/A Johnston Grocke ABN 80 165 839 163, Corporate Authorised Representative (ASIC 1240611) and its advisers are Authorised Representatives of Paragem Pty Ltd ABN 16 108 571 875 Australian Financial Services Licence 297276
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