So, it can be extremely important to make sure you have the right superannuation vehicle working for you.
Two of the most important components of choosing the right superannuation vehicle are fees and investments.
I’m not saying you should go for the cheapest fund out there because funds that appear to be the cheapest are often not the best, but doing your homework here can save you a bucket load.
The key is to make sure you are getting value for what you are paying. If there is another fund that’s offering the same thing but with lower fees, then you should switch.
For example, just 0.5% per annum higher fees may not sound like a lot right. Well if we applied an extra 0.5% p.a. in fees to a 30 year old earning $65,000 per annum, that extra 0.5% would have cost that person over $100,000 more over the next 30 years. And for some people the difference in fees can be a lot higher than just 0.5%.
We’ve even seen some cases where fee savings were projected to be in the hundreds of thousands of dollars over the person’s lifetime!
The second component to choosing the right super fund is making sure the underlying investments within the fund are right for you. The key to having the right investments is having control over where your money is being invested.
If your fund doesn’t give you the options you need, then it’s time to move your money.
One of the big problems with most super funds out there is the lack of transparency so it can be really hard to work out where your money is actually being invested.
Or maybe the problem is more that people just don’t take enough interest in how their super is invested. Either way it’s important to do your research here and take back control.
Investing needs to be an individual thing meaning that your investments need to be appropriate for YOUR circumstances not somebody else’s.
Check out this article: “the beginners guide to understanding investment risk” for more information.
Other issues with the superannuation industry are that it can be really hard for the average person to work out things such as:
- What their actual fees are
- What the actual performance is
- How their money is actually invested
- Whether those investments are actually suitable to them
If you’d like some help sorting out your super and planning for your retirement, click here to learn more about our free initial consultations.
Hope you found this helpful. Feel free to Leave us your thoughts and comments below.