With your super potentially ending up the single biggest asset you’re likely to own why wouldn’t you want to make sure you’re getting the absolute most out of every step of the way.
Superannuation is money your employer pays on your behalf (contributes) into a fund that builds up over your working career, usually until you’re 60 and ready to stop work or start slowing down. Yes, you heard that right, your employer pays it for you! This is extra money on top of your wages regardless of whether you’re full-time, part-time, or casual. You can also make extra contributions yourself to increase the amount of super in your fund.
Previously employers chose a standard fund for all their employee, however now employees have the right to choose their own super fund. This means you can have a say in where your money gets invested, and the benefits are right for you. Here are a few there are a few key things to keep in mind when selecting the right super fund for you:
Fees and Charges
Your boss may be paying your super, but you have to pay all the super fund fees and costs such as Administration and Investment Fees, and Insurance Costs. Even if you’re not working for a while, and there are no new employer contributions being made to your super fund, these fees still need to be paid, and usually come out of your super balance.
When choosing a super fund make sure your contributions won’t be gobbled up by excessive fees and charges.
Insurance Benefits
Did you know most super funds also offer some level of insurance specifically:
- Life insurance (also known as death cover)
- Total and permanent disability (TPD)
- Income protection.
Changes were made recently to remove the automatic inclusion of Life Insurance and TPD for employees under 25. This mean if you want these insurance benefits, you’ll need to ask to add them to your super fund. Income protection remains optional, and you will need to ask for this to be added to your super fund.
The fees and charges and levels of insurance differ from fund to fund so make sure you’re clear about what is on offer and how much the fees and charges are.
Investment Options
Super funds manage A LOT of money. Most super funds offer a range of investment opportunities for your money, that provide different rates of return. Some investments may be riskier that others but may deliver a higher return (more money back to you). Balanced funds generally include a mix of low to medium investments strategies.
You should look at the options available through your fund and choose products/strategies that suit you.
Member Services
To attract new customers super funds may offer a range of member benefits, everything from movie tickets, house and car insurance discounts and financial advice and planning.
Remember that you are paying annual fees regardless of whether you use these services or not, so make sure you’re not distracted by “shiny” services that will not actually benefit you and/or grow your super.
Align Your Super with your Personal Values
While your money is sitting in a fund, and hopefully growing, do you want it to help make a positive difference in the world?
What are the things that matter most to you, and how does your super fund align with your values. How does your super provider, or the companies/activities they invest in:
- view environmental issues
- view social justice issues
- treat their staff
- demonstrate social corporate responsibility.
What Do I Do Now?
If you are already working and are unsure what super fund you are with, you can ask your employer or look up your details through the ATO by logging into MyGov.
If you’re new to the workforce to get started you could ask friends and family who their super is with, or search for a super fund specific to your industry, then compare different funds through online tools such as the ATO’s https://www.ato.gov.au/YourSuper-comparison-tool/.
Once you have a super fund remember it’s not set and forget. It’s worthwhile reviewing your super throughout your life just as you would review your phone plan, electricity provider or home loan.
It’s your choice make it a good one!