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Top five factors for choosing a superannuation fund


Superannuation or Super is an incentivised, tax-efficient system designed to help Australians save towards retirement. Super is important whether you are at the beginning of your career, or close to retirement. This is because the choices you make now can impact whether you get to retire early and head to a beach in Bali, or have to work a few extra years to secure your goal retirement figure.


A quick look at super in Australia shows that:


● There are over 23 million super accounts with assets totalling $3.4 trillion dollars.

● 69% of Australians have a super fund, with 10% of Australians having more than one active super fund which can result in paying extra fees.

● 58% of employee super funds were selected by their employer, meaning the fund might not be suitable for their individual needs.


But how can you make sure your super fund suits your personal situation?

The top 5 factors to consider when choosing a super fund are its fees, investment options, performance, insurance and service options.


(Photo credit: Freepik.com)


Let's review these in more detail:


1. Fees


You need to understand what fees are applicable on your super fund. A small difference in fees can make a large difference to your final retirement figure.

Generally, lower fees are more desirable as higher fees erode your super balance over time. However, you must look at fees in conjunction with other factors like performance and services, to determine the best super fund for you and your specific circumstances.


Some of the fees applicable to your super may include:


Investment fees - the cost of professionally managing the investments your fund makes on your behalf.

Administration fees - the cost of managing your account. This may include sending annual statements and providing online services.

Performance fees - payable on some super accounts if your fund exceeds its set investment targets and/or performance benchmarks.

Investment switching fee - although some super funds allow you to make a certain number of investment option changes for free, if you exceed the limit they may charge an additional fee for switches.


2. Investment options


Super funds offer many different options for investing your money, which can be changed over time. The amount of risk you are willing to take, along with your life stage, may influence whether you take a conservative, balanced or aggressive investment approach to investing within super. It’s important you pick a fund that has investment options that suit your current needs and risk appetite. You may also wish to seek professional advice to develop an investment strategy that is most suitable for you.


3. Performance


You should aim to review the performance of your super fund on a regular basis, preferably over a period of a few years rather than only the previous 12 months. You can also compare performance among similar funds to see where your chosen super fund fits in comparison to its peers. The Australian Tax Office offers a handy super comparison tool you can use to compare super fund performance: here.


4. Insurance


Most super funds offer insurance options to members where premiums can be directly deducted from the super account balance, so you won’t notice the cost in terms of your current cash flow. Getting insurance through your super can offer other great advantages including lower premium costs, fewer health checks and tax-effective payments.


The types of insurance offered usually includes death, total and permanent disability (TPD) and income protection. You can choose the appropriate level of cover for your situation by reviewing your current insurance and then increasing, reducing or opting out entirely. You can get further details about your insurance cover by reviewing the Product Disclosure Statement (PDS) for your selected fund.


5. Services


Some super funds do not provide the same level of customer service or accessibility as others. You should consider your personal service preferences when choosing a super fund and consider whether it will meet your needs. For example: does it have an easy to use online platform where you can switch investment options, check your balance or make additional contributions online.



Finding the best super fund for you is a personal decision that depends on your circumstances and needs. You want your super fund performing at its best and working hard to ensure you receive the returns you need for your ideal retirement.


Please reach out to our team at Cleverly Accounting to learn more about potential tax benefits that may be available to you in relation to super.


By: Kim Harrison


Note: the information in this article is general advice only, it does not take into account your specific needs or circumstances. Before taking any action, please consider whether this advice is appropriate to your financial objectives and needs and seek professional financial advice before making any financial decisions.


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