How to Pick the Best Super Fund for Your Future

Superannuation might not be the most thrilling topic, but making the right choice now can significantly impact your retirement savings. With a range of super funds available, it’s essential to understand your options and choose wisely. Here’s what you should know when selecting a super fund that aligns with your needs.

Different Types of Super Funds

Super funds come in several types, each catering to different groups:

• Industry funds – Some are limited to certain professions (e.g., hospitality or construction), while others are open to all workers.
• Retail funds – Managed by financial institutions and accessible to everyone.
• Public sector funds – Typically for government employees and may include defined benefit schemes.
• Corporate funds – Exclusive to specific employers and may provide defined benefits.
• Self-managed super funds (SMSFs) – A hands-on option where you take charge of investments but bear full responsibility for compliance and performance.

What to Look for in a Super Fund

Choosing a super fund involves more than just chasing high returns. Consider these key aspects:

1. Investment Performance

Look at the fund’s returns over a five- or ten-year period rather than focusing on short-term gains. Always compare similar investment options (e.g., balanced with balanced) to get an accurate picture of long-term performance.

2. Fees & Charges

Super funds charge various fees, which can impact your overall savings:

• Administration fees – Cover the day-to-day management of the fund.
• Investment fees – Charged for handling your investments.
• Other costs – May include switching fees, withdrawal charges, or contribution fees. Lower fees generally mean you retain more of your money in the long run.

3. Investment Choices

Most super funds offer different investment strategies:

• Growth – Higher returns but more risk.
• Balanced – A mix of risk and stability.
• Conservative – Lower risk with steady returns.
• Ethical – Investments focused on socially responsible ventures. Some funds also allow you to tailor your investment mix or select specific assets.

4. Insurance Cover

Super funds usually provide default insurance, including:

• Life insurance (death cover)
• Total and permanent disability (TPD) cover
• Income protection Check the premiums, coverage levels, and any exclusions to ensure they suit your needs.

5. Extra Services & Features

Many funds offer additional services like financial planning, online tools, and flexible account management. Consider what features are important to you when making a choice.

Comparing Super Funds

To compare super funds, you can use government resources or independent comparison sites like Canstar, Chant West, and SuperRatings. Keep in mind that some of these websites may receive commissions, so cross-check information from multiple sources.

How to Make Your Choice

If you’re unsure where to start, ask your employer for a Standard Choice Form to review your options. You can stick with your current fund, go with your employer’s default fund, or choose a different one that better fits your financial goals.

Final Thoughts

Your superannuation is a long-term investment, and selecting the right fund now can have a lasting impact on your financial future. Take the time to compare funds, assess their benefits, and ensure your money is working for you. The earlier you make an informed decision, the better positioned you’ll be for retirement!