Is your super really that super?

It’s all too easy to think of super as a “set and forget” situation. Many of us have had the

It’s all too easy to think of super as a “set and forget” situation. Many of us have had the same fund for decades.

But how much thought went into that original decision? Was it something you researched at the time, or did an employer choose it for you?

It’s strange to think how quickly we can commit to such an important long-term decision. None of us would pick the first home renovator we find, or pick any old health insurer. Why does superannuation seem to be the exception?

To find out how much difference your choice of fund makes, there are three major points to consider. Have you looked into them all?

How much are you paying in fees?

Super is the longest-term investment most of us are likely to make. When it’s accruing over so many decades, the tiniest variation in fees can lead to very different outcomes.

Be sure to read your super statement carefully to see how much you’re paying in additional costs. Multiply this amount over years and decades to put this amount into its proper long-term perspective.

How well are your investments performing?

The investment performance of your fund is critically important.

Once again, a quick glance at your latest super statement – followed up with some basic online research – will help you find out how much bang you’re getting for your buck.*

The difference can be substantial. Over the past ten years, AustralianSuper’s “Balanced” option (where most members have most of their money) has returned an average each year of 7.30%, compared with the median balanced fund return of 6.44%. The long-term difference can be staggering.

How large is your super fund?

The larger the fund, the more likely it can negotiate lower rates when hiring some of the world’s best fund managers to invest members’ money. Smaller super funds simply don’t have the capacity to do this – so their members may find themselves paying more, for less.

Furthermore, bigger funds are likely to have access to some better investments that offer greater returns for members. AustralianSuper, as Australia’s largest super fund, has allowed its members to become the proud owners of large shares in:

  • Ala Moana in Honolulu, the world’s biggest outdoor shopping centre;
  • The massive King’s Cross redevelopment in central London;
  • Parcels of skyscrapers in Boston and Washington, DC.

These are significant global investments to which members of smaller funds may not have direct access.

Do you feel like your super fund is working with you, or against you? Have you compared it to the other options available?

This article has been sponsored by AustralianSuper Pty Ltd ABN 94 006 457 987, AFSL 233788. The views expressed are those of Starts at Sixty and not necessarily AustralianSuper. For more information, please visit the AustralianSuper website.

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* Investment returns are not guaranteed. Past performance is not a reliable indicator of future returns.

  1. Just another tax avoidance system for the rich. Put only what you have to into it, and invest the surplus yourself.

  2. I have an excellent public sector fund that has won fund of the year several times now. The fees are reasonable and the customer service etc excellent. However, I wonder at the value of superannuation period.
    Because your super is invested, it’s subject to often precarious market trends. One week you can have $300,000, the next week $100,000 (hyperbole) and it’s okay if you have sufficient life left to pick it up again if it falls over. If you aren’t, then your super is gone.
    Investing in a commercial property is probably a better idea than super, with the sole exception that with super, your employer contributes. So have a super account and back up with an investment property or something else you can convert to an income stream later in life.

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