Your superannuation is often not about the fund you have. It is more about how you set it up and how you use it.
The first critical requirement is that you realise that it is your money and start taking care of it.
Unfortunately, most people ignore their superannuation. And if you are like the majority of employees starting a new job, you flick past it when starting a job as just another form to sign. The fact is that you don’t have to go with whatever super fund option your new employer offers. With a few exceptions, you can choose any fund you want, and at any time.
So regardless of the fund you are in, the most important things you should check in your super are:
- The investment options are basically the engine room of your super savings. The better you can do here, the more money you will make. So see what is available. Most people accept the default option which is usually a balanced fund. That may not be consistent with your attitude to risk. You can ask any financial adviser experienced in super and investment to help you here.
- You may have insurance in your fund that you didn’t ask for, but you certainly pay for. This is an opportunity to review how much insurance you need in your particular circumstances. In my experience, this type of insurance in super generally doesn’t cover home loan and personal debt. Also check whether it is fixed cover where the premium rises each year or fixed premium where your cover decreases each year. Fixed premium insurance might be cheap but the level of cover won’t be there in the longer term when you are most likely to need it.
- Nominate beneficiaries to receive your super (including your life insurance) if you die prematurely. Be aware that there are only a very small number of nomination choices which include immediate family members and financial dependents at time of death, but exclude siblings and parents.
- Fees are important but they generally only become burdensome when your fund is not working for you. Industry funds providers make a fuss about about fees because price is their selling point; but even if you have an industry fund there is a lot you can do to make it work for you before you would consider changing funds. So before you worry about fees, do your part to make your current fund work for you. Having said that, there are a few older retail funds out there that charge way more than the current (much more competitive) market. So if you have a personal superannuation fund arranged by an adviser that is more than 5 years old, check the ongoing fees you are paying, particularly if you never see the adviser.
You can see that superannuation is not only a long-term savings vehicle, but also a useful family planning opportunity just in case something out of left field happens to you. Not only that, but your super is the one source of money that will be there in the case of dire medical or financial emergency on the journey to retirement. So don’t ignore it. Look after it and it will look after you.
I am local in Brisbane westen suburbs and available for a coffee anytime in business hours if you want to ask questions.