Superannuation, in its simple terms, is all the money that you and your employer put aside to fund your retirement, however long away that may be. Since contributions are added to your super fund over the length of your working life, you’ll need to shop around and find a super fund that suits you and your needs.
Once you start working, your employer is likely to have a super fund that they use for all their employees. This is usually a special type of ‘no frills’ super fund called a MySuper account with basic features and fee structures. In most cases, you can decide whether you want to use this fund or nominate your own, but at this point, many find it all too easy to shrug and say, “Okay cool, let’s go with yours.”
The thing is though, you could probably do a little bit of research and find a fund that better suits your needs or priorities. People often look for a fund with features such as lower fees and better interest returns. Why? Because the money you contribute to your super gets invested by the fund to accumulate investment returns over your entire working life, meaning that the difference between a good annual return and an average one could equate to thousands or tens of thousands of dollars. It’s important to remember however, that past performance isn’t always a guarantee of future performance, so make sure you do your homework and choose one that’s best for you and your situation. If you want to a know more about how super investing works, check out our Beginner’s Guide to Super.
There are plenty of different funds to choose from, and they all offer different investment options different investment options, benefits and fees. The best super fund for you probably depends on your situation, your level of super savings and how much money you have coming in. So there’s no right answer, until you consider your financial situation.
Probably the worst thing to do in this situation is to get a new super fund each time you get a new job, thereby spreading your super out across multiple different funds. The main reason you might want to avoid this is to prevent paying multiple fees and to give your super the best chance to really grow. To combine all your super funds, the best thing to do is decide on the fund that’s right for you, then chase up all those different super accounts and put all your super savings into one place. Most super funds will actually help you do this, but there are also some online services online services that’ll help to combine all your accounts. You can also create a myGov account and link to the ATO to track down all your super accounts.
Moral of the story? Keep all your super together, in your chosen fund, to help build your wealth and prevent paying multiple fees. Simple stuff.
Information current as at 14/08/2017.
This information is intended to be general in nature only, and has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation and needs. When in doubt always seek professional guidance.