Apparently Australians are very lazy when it comes to comparing super funds and changing to better performing ones.
I have looked into it, and it does seem quite complicated, especially working out what needs to be compared.
Anyone have any tips?
I see there are resources at https://www.industrysuper.com/compare/compare-funds/ but wanted to hear from any savvy Ozbargain members before jumping in.
These funds also compare default options only. Many times these options are total rubbish which many ppl aren't actually in,skewing the results and making something good look bad.
The ATO recently released a personalised Super fund comparison tool, you can find info on it here
I believe it only compares the 'default' MySuper balanced funds but may give you an idea of where to start. If you're younger and can absorb more risk then you're more than likely better off in a growth fund than the balanced/default option.
Also a little reading on it here, interesting that they performance test them all and will blacklist them if they fail 2 years in a row.
A lot of the "performance" depends on an individual's investment choice(s). There are stacks of people who don't even know which investment option(s) their own money is sitting in.
Not to mention the fees associated with those investment choices i.e Admin fee, management fees and performance fees.
How true is this comment!
And also insurance product with existing health conditions cover
And worthwhile knowing there is no regulation on the terms balanced, growth etc. Eg a fund can have 93% in shares / property growth assets and still be called Balanced. Not so Balanced hey. A balanced fund can also be 50%.
Not to mention there isn't sufficient regulation on what is a Growth or Defensive asset which allows manipulation of the riskiness of the fund.
Seek advice!
The biggest decider ii your age and how much risk you want to take. If you're young, go for high risk options because you have a chance to recover if things go bad.
The largest detractor to returns is fees, find a fund with low fees because you're paying for it regardless of how it performs.
Three primary things people look at super fund;
- Fees
- Performance
- Insurance cost (Death, TPD, Income)
If its hard to find out, avoid. If they perform badly, avoid. If their fees are low, they probably skim of the performance. If the performance is high, double check the fees.
On a sidenote does anyone find it odd that companies are allowed to not pay your super for 3 months?? That's a 3 months interest free loan from employees. Wtf
On a sidenote does anyone find it odd that companies are allowed to not pay your super for 3 months?? That's a 3 months interest free loan from employees. Wtf
Or your company has to borrow money to pay your super monthly. Depends on your company account health
Like your council rates, it's due to be paid quarterly but covers a period of 3 months. It's as 'interest free' as your rates payments are.
Australian Super is very good !
Agreed,
Was with REST Super and they were OK but nothing special.
Since changing to Australian Super i've been happy with the returns and the fact that they're constantly rating very highly in returns.
Previous employer tried to convince me to go to AMP Super.
Said hell no.
Previous employer tried to convince me to go to AMP Super.
Said hell no.
Best "no" you'll ever say.
Depends which AMP Super you were going to end up in.
AMP Signature Super is actually rated pretty high and has low fees, but usually has to be accessed through a corporate membership.
Like all broad-based statements, saying AMP is rubbish doesn't tell you the full story, so don't believe everything you read on the web/OzB
Risk is the single best lesson you can learn when it comes to your superannuation
As for where you put your money - up to you, but Australian Super should be the first fund you put on your list to consider.
go onto r/australianfinance and ask the question then.
Generally, SunSuper, AusSuper and i think HostPlus are the trio rated best.
You want as low of a feee as possible, as past performance is not an indicator of future etc.
Im in my early 20s and on a "high growth" plan with SunSuper which seems to return about 10% in nominal amounts a year. I am reasonably happy with them.
Barefoot investor. Have a read, not be all and end all but a good starting point.
Can't say without knowing risk appetite, salary, current balance, retirement horizon, etc.
I'm close to retiring and have 30 years of contributions and have a different fund to my 18yo daughter who has a different fund to my 24yo who has a different fund to my partner.
You have much to learn…. And at least you know this.
Most citizens of this great brown land don’t bother learning, or even consider actively managing the major thing that will determine how long they need to work and what sort of retirement life they will have.
Risk vs return, fee structures, etc all need you to develop knowledge and apply it to your worthy self.
Even asking the question puts you miles ahead of the poor souls that current affairs programs regularly line up for us. No super fund, or any investment of you’re time and money is ever ‘set and forget’
Plenty of good resources already mentioned and I’m sure that you will get lots more - start learning and remember that it is a long term process, so you will develop your knowledge over years. You can likely retire early and comfortable if you want to.
Enjoy.
Often see the statement "younger people can afford to take higher risks, but as you close in on retirement you should move your investments into lower risk areas". While high risk investments tend to perform better over the long term, it doesn't mean that they are exclusively for "young" or non-retirement age people. Think about the last 12 months, would you have liked to have all your investments in cash and bonds when the equity markets have grown by over 20%?
Most people can expect to spend up to 20 to 30 years in retirement and if you do not go for growth, you can expect your retirement funds to dry up pretty quickly. If you take a risk (and it is a personal choice/risk) you could target up to 7 to 10% growth and try to squeeze more life from your super.
It is certainly a personal decision, but too many "grey hairs" get pushed into low risk bonds, cash, fixed terms investments which may not necessarily be the right thing when your super can be made to work more effectively over the long term.
Ideally, it's a question of finding the right blend of growth and fixed income rather than stuffing everything into one type of investment
High risk = high rewards. Low risk = poor retirement.
Don't be one of those people that take the safe route and ends up with a tiny bag at retirement eating ramen to survive.
Forget the boring 7% to 20% return. Investing in nascent and cutting edge technologies has the greatest potential for parabolic returns. Take control of the funds ASAP and start investing the way you want to.
I've worked in the superannuation industry for years. I agree it's hard to compare as products can can without much notice. The ATO comparison will only compare the My Super (default) investment option of each fund. A good place to start with is your annual statement to get an idea of total fees and returns you've earned during the financial year. Most super funds use a $50,000 balance example in their PDS - another way to compare fees.
I used the government comparison tool and it was projecting a $300,000 difference in retirement between NGS who I am with now and Australian Super. Have I missed something here or should I change it as soon as possible?
Past performance is not a reliable indicator of future performance.
and
SuperRatings receives fees for providing superannuation consulting advice to clients, which includes benchmarking, assistance with tenders, administration assistance and other financial advice.
and
Important information about SuperRatings is contained in the Financial Services Guide, you should download and read it before entering the site.
read and consider all that
then consider your personal circumstances before making a decision, in regards to age, salary, assets, risk tolerance etc