To many, superannuation is “something to worry about later” or something that is taken care of by someone else, especially when it comes to millennials and younger Australians.
But now more than ever before, it is vital that Australians of all ages have a firm grasp on what their superannuation is, how much they have, what risk group they are invested in and what are the true benefits of managed retail funds compared to the potential of an SMSF.
Superannuation adds up over your working life, with a 9.5% mandatory contribution from your employer being put away to the fund of your choice, invested and building a nest egg for your retirement – from which the average Australian can expect around 20 years of retirement.
With retail funds under intensive scrutiny during and after the Banking Royal Commission in 2018/2019 and the downward pressure on the Australian economy as large sections of the ageing Australian population realise, they may not have enough left to fund their retirement or the lifestyle they have been accustomed to while in employment, understanding your super is not something anyone should take lightly.
Do you have super missing super?
You may have changed jobs or worked through school or university holidays not knowing that you were, in fact, receiving regular superannuation payments from your employer.
You could be forgiven for not realising when you were filling out employment documents that your new super is not the same fund as your old super, or maybe the company had a preferred super option and it was easier to just go with them.
As such, you may have misplaced or lost some of your hard earned retirement funds. On June 30 2018, there was almost $18 billion in lost and unclaimed super at the Australian Tax Office.
It never hurts to check if you have lost superannuation, and also it doesn’t take very long to read through the ATO website, fill out a few forms and check if you have money sitting around you simply forgot about.
Understanding your fund’s performance
There is intense scrutiny around the banking & insurance sector, many of whom are in superannuation. Fees for no service, exorbitant executive salaries the list is endless. So seeing that you are invested in a fund and they are collecting fees, it is paramount that you ask to review the performance.
Not only the performance of your money but the performance of the overall business, the other funds under management, should you consider switching.
For example, if you are in your mid-thirties, you have options to invest in more risky types of investments, as you can enjoy the highs and if there is a downturn, you have time to recoup those losses.
Meantime, if you are in the twilight of your career, then low-risk investments are where you want your money parked.
What about control?
When it comes to your superannuation, being part of a retail or industry super fund, gives you little to no control over your money, over who controls it and what they do with it – only the type of risk that you can expect your money to be under.
If you are looking for more control over your investments, you may want to invest in property as the market offers opportunities in the current climate or if you want to ethically invest, then a self-managed super fund could offer what you are looking for.
How does a self-managed super fund work?
With 597,000 SMSFs holding $697 billion in assets, with more than 1.1 million SMSF members as at 30 June 2017, if you considered a self-managed super fund you have the chance to invest your own assets, the way you want.
Whether your investment is shares, an investment property, or if you’re a small business owner looking to invest in an office so your business can rent back, the choice is yours.
Many people feel nervous about the whole idea of a self-managed super fund. It is true, there is an element of risk, however, this risk shifts based on where you invest, however, you will have support along the way to ensure you are making the right decisions.
Due to the strict rules and regulations around superannuation, you will need a licenced, registered and professional SMSF administration company to help you set up and manage your superannuation.
In addition, they will need to provide your accountant with details come tax time each year.
Not all SMSF administrators are the same!
When it comes to SMSF, you might now have control of your nest egg, but where to from here?
Many SMSF services provide just that, a service to set you up, but others provide you with an education service, updates and advice along the way as well.
Smart Money Company provides a full suite of education, investment advice, trading platform and SMSF administration advice to their clients in a way that is geared to educate & provide sustainable investment outcomes over the SMSF’s desired lifetime.
The big difference with Smart Money Company is they are not asking you to deposit anything to them, everything is held in your accounts, every transaction is managed by you, its just done under the expert and watchful eye of licenced and qualified industry professionals.
All this has been created to give you peace of mind, reduced administration fees and sustainable returns for the future.
So rather than sitting back and looking at your superannuation balance going backwards or not even knowing if you have any at all, why not contact the Smart Money Company or attend one of their free seminars run twice a month in Brisbane to take control of your financial future sooner.
Please note, all information is general in nature and does not take into consideration your financial situation.
Wondering now whether you should take the plunge? We take a deeper look at some of the key risks & benefits of setting up your own SMSF here