There are many super funds for us to choose. And it is important to choose wisely.
At the end of the day, this is your money that is being saved all your working life for the time when you finally retire,
and enjoy fruits of your labour.
I have been talking on this channel a lot about superannuation, and different strategies you can employ to benefit from this tax-driven saving vehicle,
but now is the time to look at super as a product and how super funds differ from each other and which one might be good for you.
My name is Katherine Isbrandt from About Retirement. I'm Certified Financial Planner
and you are watching About Retirement TV, the place where you can find all the information you need
if you are planning to retire in another 5 to 10 years or if you have already retired
and you want to improve your financial position from income or assets perspective.
“It takes as much energy to wish as it does to plan.” -Eleanore Roosevelt
So let's stop wishing for the best future, but rather concentrate on planning it and planning your super getting it right
and in the way it works for you is very important.
Having said that, such decisions should only be made based on information, research and professional advice and not wishy washy guessing game.
Just because something sounds good on the TV ad, doesn't really mean it is good for you.
Just because something works for your friends, doesn't mean it will work for you.
So do your homework well, understand your abilities, your strengths and time you wish to spend on the subject to set yourself up correctly.
Let's start from the bottom and we will work our way up:
Industry and Retail funds
This is a simple version of a superannuation fund, does not require much of the decision making from you, set up for simple life situations.
You more or less take what's given to you. You have very little control over investments, insurance or costs.
It is one of those set-and-forget superannuation products for people that really don't want to be too concern with ongoing management
or having to make any decisions around those savings.
Corporate Funds
This is a more sophisticated form of superannuation products, usually provided by big organisations for their employees,
they can provide a great deal of investment choices and often very lucrative insurance offering,
but nothing is for free, as always higher quality means usually higher costs.
Wrap accounts and investment platforms
Those types of super funds are often provided by professional advisers.
They can be more expensive in the area of administration costs but they can provide you with a great deal of savings
when comparing with the other two super funds just mentioned before in the area of investment management costs.
This is where professional adviser can assist and support with an incredible investment choice to manage your asset diversification
which in turn can reduce the level of volatility, this is how professional adviser can assist with tax planning as well as estate planning.
Those funds could work as a replacement of your self-managed super fund, if the main purpose of opening your own SMSF
is investing for example into listed companies in Australia or overseas, those investment platforms can replace your SMSF,
so you can have the same investment choices without any legal responsibility and very often at lower costs.
Self Managed Super Fund or SMSF
This is the most sophisticated type of the superannuation you could have.
This is designed for people and families that want to have full control over how their money is invested,
if they wish to have control over tax outcomes as well as estate planning outcomes.
And it is a great investment and retirement savings tool, especially if used for the whole family, but as we know, nothing is for free.
You take on a great deal legal responsibility as the fund's trustee,
there is quite a bit of work you have to perform every year and costs of such funds are usually much higher.
This is the reason why ATO and ASIC recommend such funds for superannuation savings of atleast $500,000 or more.
So as you can see a good financial planner can assist a great deal in choosing the right superannuation fund for you.
Not all industry funds unfortunately want to work with external and independent financial planners, which is a pity,
because at the end of the day this is a client who is missing out,
but fortunately, there are so many superannuation choices
that these days that you don't have to feel stuck with the fund that is not assisting you with achieving your retirement goals.
So which of those funds are good for you?
Which of those funds will provide you with the best financial outcome?
What is it that you desire from your super?
Are you looking for an easy hands-off fund, where all the work, responsibility, and choices are given to the super fund?
If this is your answer, then the first two are usually your best option.
If you want to have some degree of control and you want to manage your tax,
returns and legal outcomes with assistance of a professional advice, then the second, third and fourth options might be the best.
But if you want to go outside of the norm of superannuation investing, you want to create a more family growth opportunities,
purchase residential properties for example or an offices, invest into shares or other financial instruments
and have a greater control, while utilising professional advice, then SMSF might be a very good option for you.
We will be talking about SMSF as it is a great investment and retirement saving vehicle, but most certainly it is not for everyone,
so you need to fully understand your legal responsibilities before you jump into creating your own superannuation fund.
I hope you enjoyed this video, if so, give it Thumbs up and Subscribe to this channel to always be informed of my new video coming up.
And if you would like to get more information about retirement, visit my website AboutRetirement.com.au
and while you are there, sign up to my newsletter to be always kept up to date with any changes that can affect your retirement plans.
Now my video recommendations, to continue our theme about superannuation funds,
watch “How to choose super fund, Best Fund – Really?”
The second recommendation is “Super Fund Fees & Charges explained”.
I will speak with you in my next video, bye.