How to Set up your Super Fund
Does my super offer choice?
Many people think super is a 'set-and-forget' account believing that their employer pays the super contributions and someone else looks after the investments, and that’s how the story goes until the end of their working life.
But the reality is that superannuation funds allow members a level of choice in relation to how the money is invested, which means it can be up to you to create what your retirement adventure might look like. You can also see a superannuation consultant, like Investment Zone for guidance.
What investment options are available for my super?
The first step is to find out what investment options your super fund provides. There may be a couple of options, or there may be many. It all depends on the type of fund you are currently in or are looking to join. Once you know what’s available, you can match it to your personal requirements.
The fund’s investment menu should show you where your money would be invested based on your selection. Typical characteristics of investment choices within super funds are:
Growth – aims for higher growth but accompanied by higher risk;
Balanced – aims for reasonable returns and more acceptable risk;
Conservative – focuses on lower risk which usually means lower returns;
Cash – aims to guarantee your capital but with little or no growth.
If you don’t choose a super fund, your employer must pay your super into a fund that offers “MySuper” – a default fund that provides only two investment options which depend solely on your age. A default option may be a good strategy, but it is still best to compare it to others rather than accepting it blindly.
What type of investor are you?
There is also no single answer to determining which superannuation options are the best to invest in; there is no “one size fits all”.
Obviously from time to time shares will perform the best, while at other times it will be more beneficial to have a higher investment in cash or fixed interest. In reality, for most people the right allocation will be somewhere in between.
What’s right for you will depend on your age and timeframe; your attitude to fluctuations; and the level of certainty you need to fund your own retirement.
If you are close to retiring, think about how soon you want to access your super. On the other hand, if you won’t retire for 20 or more years and short-term share market fluctuations don’t bother you, then this will impact on your choice.
Can a Financial Planner help structure your super?
When it comes to setting up your super and monitoring it and making tweaks to match your life stage, , a good Financial Adviser can help you.
Need to talk to a Financial Planner?
The information in this communication has been prepared on a general advice basis only. The advice has been prepared without taking account of your specific objectives, financial situation or needs. Accordingly, you should, before acting on the advice, consider the appropriateness of the advice having regard to your objectives, financial situation, and needs. In cases where the advice relates to the acquisition, or possible acquisition, of a particular financial product, you should obtain a Product Disclosure Statement (or other relevant information statements) and consider such document before you make any decision about whether or not to acquire the product. For these reasons, it is imperative that you seek advice from your financial adviser before making any investment decisions. Investment Zone Pty Ltd (ABN 18 104 622 611) provides financial services as a Corporate Authorised Representative no. 296974 of Financial Force Pty Ltd ABN 42 091 425 464, AFSL no. 238337