When it comes to super, a lot of people don’t really know how their funds are being managed. Although most decent accountants can advise you on what you should be doing with your super, it is important to have a decent understanding of the Australian super system.
Although it is very difficult to access your super before you retire, you can choose how and where it is invested. If you have a substantial amount of super, then you should definitely consider looking into the types of super funds out there. Choosing one which suits your personal situation can cause your super account to grow substantially over time. Some of the more popular super fund options include:
My super is a government run superannuation program designed to become the default fund for people working for new employers. It has relatively low fees when compared to most other types of funds, making it a good choice for people with low super balances. However, it only provides basic insurance cover and one investment plan.
Industry Super Funds:
Most industry super funds were developed by trade corporations or members of a specific industry to provide super investment services to workers in that industry. Most industry super funds work on a not for profit basis, which means that your fees are generally small. A lot of larger industry super funds are now open for public investment, and some people argue that they have higher returns than other types of fund. Note that investment options are usually limited to a few choices with industry funds.
Retail Super Funds:
Retail super funds are generally run under a business model by banks or other financial institutions. Although they may charge more fees than other types of funds, they offer investors a lot more flexibility. In most cases, anyone can join a retail super fund, and it is worth doing your research to find the one which is right for you.
Self Managed Super Funds:
If you are pretty good financially and consider yourself a seasoned investor, you might choose to put your money into a self managed super fund (SMSF). SMSFs give you complete control over your super, how it is invested, and where it is invested. They are a lot cheaper than most other super funds, but they do require a lot of time and effort to run effectively.
How Do I Choose A Super Fund?
When it comes to choosing a super fund that works for your financial situation, you need to consider a range of things. Think about how much money you have in your super account, and how fast this will compound in each account. Make sure that you take note of the fees that each fund charges, and the risk associated with their investment strategy.