Australian superannuation funds
Australian superannuation funds are a great vehicle you can use to save for your retirement. It is a known fact that the age pension alone can no longer fund a comfortable lifestyle in your later years.
There is no single superannuation fund that is best for you. As with many financial products it depends on your situation and what your financial goals are. Factors like your age, your income, investment risk and choices, and extra contributions all add to the final balance of your super fund.
Choosing the best superannuation funds
Choosing the right superannuation fund to see you through until your retirement years can make a world of difference; however there hundreds of Australian superannuation funds to choose from. It may seem impossible to decide with such a huge selection available. That's why we've outlined some factors to consider:
1. Investment choice, risk and strategy - how you choose to invest your superannuation fund can mean the difference between hundreds or thousands of dollars (assuming all other factors remain the same). If you are unsure on how your super should be invested, speak to an xLife adviser who can offer you a range of investment tips.
2. Fees - there are a variety of fees each superannuation fund outlines in their product disclosure statement (PDS). It may help you to compare the fees of each fund, particularly exit fees.
3. Personal insurance - superannuation funds often offer term life insurance with their products. Some may also offer trauma insurance, TPD insurance or even income protection insurance. When considering insurance in super, it is important that you ensure you are covered for the correct amount, and that you clearly understand the claims process, as it is often different to a personal insurance policy held outside the superannuation environment.
You should also consider the cost of the insurance premiums between each superannuation fund as these will vary. This is important because any life insurance policy held inside the super environment is funded by your superannuation fund. If your life insurance premiums are high they will slowly eat away at your superannuation balance, possibly leaving you with less super funds.
4. Additional features or services - these will vary between each fund, and can help you manage your superannuation better. They include things like online account management and flexible investment options. It may be beneficial to compare the investment options each fund has. The greater the options, the more flexibility you have, and the greater the opportunity you have to grow your super.
You should also find out if your chosen fund offers anti-detriment payments. An anti-detriment payment is a sum of money paid by a superannuation fund upon the death of a member where a lump sum death benefit is paid. Australian superannuation funds are not under any legal obligation to offer an anti-detriment payment and will often not make one unless specifically asked to do so. An anti-detriment payment often equates to thousands of dollars, so it is well worth finding out about.
Industry superannuation funds vs retail superannuation funds
With the information above, it's clear that fees are not the only factor which affects your final super fund balance. You should not only base your decision on fees, but also on investment risk, choice and strategies; as well as personal insurance, and any additional features or services offered.
Get help choosing the right superannuation fund for you
If you are unsure which superannuation fund suits your situation, speak to an xLife superannuation adviser. We can do the research for you and even project how much money you will have in retirement.
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Talk to a Specialist Superannuation Adviser on 1300 135 205 about growing your superannuation today!
May 2010
