Important things to know about your super

The Superannuation sector at present manages about $ 1.8 trillion of Australian’s retirement savings and a current report released by the Economic Services Council and ING Direct found that more than 80% of workers acknowledge superannuation as vital in delivering a comfortable retirement. Regardless of this, the report located that nearly 3 quarters of Australians are in their employer’s default fund with only 27% likely to modify their fund provider in the future. These findings are constant with numerous other indicators in the market that illustrate the disparity among significance and action when it comes to superannuation. It is my belief that the driver of this disparity is primarily influenced by the perceived complexity of Superannuation but like all complicated issues, breaking them into component parts is usually a very good initial step.

Super is a platform

It’s essential to recognize that superannuation is a ‘platform’ it’s not a single ‘product’ that is purchased. This platform bundles your retirement savings, life insurances and other services all together to enable a comfortable retirement. Pondering of it in this way allows us to pick apart the component components and decide what option very best suits your needs.

2 important inquiries

When thinking about your retirement nest egg the major queries are:

1) What growth/return am I getting on my funds?  and

2) How safe are my funds?

The value of these 2 elements was acutely evident in the expertise of many investors prior to and for the duration of the GFC. In the couple of years prior to the GFC there had been said to be just 2 types of individuals: these that have been generating funds and those that weren’t investing. Once the sub-prime market began to collapse returns and liquidity fairly rapidly dried up, the impact on a lot of people’s retirement savings was sobering – to say the least. This marketplace story is repeated throughout history but it does not mean that investors require to be crystal ball-readers of the market place to finish up in a great position.

Investment alternatives

When assessing a superannuation fund, have a close appear at the investment alternatives obtainable. These will be in 3 primary forms:

• Quantity and kinds of investment funds accessible


• Access to direct shares, and


• Access to fixed interest and term deposit merchandise.

You require to make sure that the variety of investment funds that are available to you make sense to you and fit with your investment objectives, be that growth or defensive. Also look for a excellent breadth of supplying including international funds, ethical funds and other investment classes that you may want to include in your portfolio at some stage in the future.

Another way to get access to far more investment alternatives is to make certain the fund provides members access to direct shares. This enables you to take a lot more control more than how your income is invested by providing you the alternative to invest in shares directly or take benefit of ETFs and a wider selection of investment funds. Finally, regarding your investment possibilities, it’s worth locating out whether or not there is the selection of investing straight in money goods. At times it can be prudent to have the alternative to invest a portion of your retirement nest egg in money and at that time, it will be easier if those alternatives are currently at your fingertips rather than attempting to move your income elsewhere.

Life Insurance

Life insurance coverage is one more important element in your decision of super fund. Most funds are able to provide options for cover in the case of death, disability or illness, which can support you and your family get via any unexpected events prior to retirement. In fact, some of the income protection policies within super even continue to make the Superannuation Guarantee (SG) payments whilst you are off operate, so that your retirement savings can continue for the duration of this time.

Check on the types of insurance provided within your fund of selection. The primary options are:

• Life,


• Total and Permanent Disability, and


• Earnings Protection.

Also investigate the level of cover provided. There is a much more than $ 4 million distinction among the leading and bottom levels of life insurance coverage cover in the market.

Other solutions

Lastly, verify what other services are accessible to you for the price tag that you spend. Over and above the number of investment choices, access to direct shares and term deposits it’s essential to locate out what sort of financial advice alternatives are accessible to you and how simple they are to access. Some funds have their own financial planners, some rely on third-party ne2rks and other folks have limited or no access to financial advice at all. Access to this guidance becomes especially important the closer you get to retirement but is also relevant whilst in the accumulation phase in order to ensure your contribution level, risk profile and investment strategy will provide your anticipated retirement ambitions.

Be conscious of fixed costs (which can range from $ to $ 175 annually) and variable fees (on prime of fixed charges, based on your super balance) and ensure you are comfy with the quantity becoming charged for the access and solutions you are receiving. Current compliance alter needs have meant that the Item Disclosure Statement will clearly state what you can anticipate to pay.

So do not delay in reviewing your super, it is not as scary as you might consider. Thinking of superannuation as a platform with 3 principal components – your retirement savings, insurance coverage and solutions – it can be easier to either conclude regardless of whether the fund you have selected matches your requirements or no matter whether you ought to consider moving your funds.

Prior to creating a selection it is worth speaking to an Independent Monetary Planner, as some skilled guidance now can make a significant difference in retirement.

Important things to know about your super