Retirement nest eggs: Advice is crucial

Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)

 

The banking watchdog believes Australians should be getting better advice in managing their retirement nest eggs so people do not end up having unnecessarily frugal lives post-work.

Australian Prudential Regulation Authority deputy chair Helen Rowell says the superannuation and wealth management industry is far too focused on accumulating savings.

“Evidence shows that the majority of Australians do not adequately plan for their retirement or make the most of their assets in retirement,” Ms Rowell told a Australian Financial Review super and wealth summit on Monday.

“One of the problems with the ‘nest egg’ motif is that it puts a focus in the consumer’s mind on accumulating the largest possible pot of money and then sitting on it.”

She said the federal government’s recent retirement income review found many people die with the bulk of their life savings intact.

“Rather than a sign of generosity to the next generation, this is widely accepted as evidence that retirees often lack the necessary guidance or options to help them effectively manage their nest egg,” she says.

“And so often (they) are more frugal than needed in their retirement spending for fear of running out.”

Ms Rowell says this under-development of retirement income products is a missed opportunity for the wealth management industry.

“The sector could be doing more to demonstrate its valuable contribution to solving the retirement puzzle by offering high quality financial products now and into the future,” she said.

But equally important, providers should also think carefully about creating products that will achieve the right objectives for consumers.

“What APRA wants to avoid is a repeat of some of the legacy issues we have spent years trying to fix or eradicate, especially in life insurance,” she says.

 

Cost of Retirement – How Much Is Enough for a Comfortable Lifestyle?

No one can blame you if, during your 20s and 30s, you didn’t really think much about retirement. If you’ve been putting away a reasonable fixed amount (about 10% of your monthly salary) toward your savings since you first started working, it’s highly possible you’re set for life.

But if you haven’t been saving regularly, and you want to maintain your present standard of living well into retirement, you’ll probably need to save more than half of your annual income.

Of course, the amount you’ll have to save also depends on how old you are now and how early (or late) you plan to retire. If you want to live a comfortable life, you also have to factor in your criteria for what living a comfortable life is all about.

In case you’re feeling a little lost and want to know the average cost of retirement per month, then this article can help.


The Retirement Standard According to ASFA

The Association of Superannuation Funds of Australia (ASFA) invests a ton of resources in keeping track of retirement expenses and providing estimates on the cost of retirement in Australia.

Each year, ASFA releases budgets for seniors who may be single or living as a couple, providing approximations on how much money they’ll need to maintain a modest or comfortable standard of living. The document called the Retirement Standard is a terrific resource if you want to get a fair idea of how much money you should be saving for retirement.

The Standard presents three broad lifestyle categories: a comfortable retirement, a modest retirement, and a retirement completely supported by the Age Pension.

  • Comfortable: A comfortable retirement entails having enough money to cover healthcare, house repairs, local holidays, occasional trips abroad, a good-quality car, regular leisure and lifestyle activities, as well as a few other luxuries that go into daily living. Maintaining a comfortable lifestyle is predicted to cost about $65,445 per year for couples between the ages of 65 and 85. A single person might need a budget of $46,494 annually to maintain the same standard of living.
  • Modest: Cutbacks in many living expenses are necessary for a modest retirement. However, this lifestyle still allows for the purchase of a car and participation in plenty of leisure activities that probably won’t include overseas holidays. A modest lifestyle could cost about $42,621 per year for couples between the ages of 65 and 85. For a single person, a $29,632 annual budget may be enough to cover expenses.
  • Age Pension-dependent: Retirement supported by the Age Pension typically entails a conservative way of life as you’ll be living on a limited budget. This means the majority of spending would be restricted to necessities. For couples, their combined Age Pension will provide around $35,000 per annum. For individuals, the amount would be approximately $23,000. Note that your Age Pension will vary depending on your income and assets. Since this amount falls short of even the moderate threshold for retirement, there wouldn’t be money to spare for luxuries or non-essential items.

While these ASFA estimates are based on data-based projections, they don’t consider the average monthly cost of retirement homes in the distant future, that is, in case you don’t see yourself living in your own home.

However, the above figures can serve as a guide as you try to build up your retirement fund. And to ensure you cope well with the cost of retirement in the future, it’s best to start saving today.

 

 

If this article has inspired you to think about your own unique situation and, more importantly, what you and your family are going through right now, please contact your advice professional.

(Feedsy Exclusive)

Ethical Investing: Types, Pros and Cons

Ethical investing has been gaining prominence over the last few decades. Find out what makes it an attractive investment strategy in this post.

 

Ethical Investing: Types, Pros and Cons

The investment technique known as ethical investing prioritises the investor’s moral, religious and social ideals over financial gain. The reason for this is that a growing number of investors have begun to demand social responsibility from the companies they invest in, primarily because of the rise in dubious and unlawful investment arrangements.

Ethical investing entails fair labour practices, the production of healthy and beneficial goods and services, and abstaining from unethical business activities.

Investors who want to utilise their money to support good causes should consider ethical investment. Those who are interested in this type of venture have several options to choose from.

 

Types of Ethical Investments

Below is a list of the different types of ethical investments:

1. Environmental, Social and Governance Funds (ESG Funds)

ESG investment strategies target shares in businesses that follow good corporate, social and environmental practices. ESG funds take into account the potential effects that environmental, social and governance factors may have on a company’s performance when making investment decisions.

2. Faith-Based Funds

Faith-based funds (aka morally or biblically responsible, or faith-driven funds) only own stocks that uphold certain religious principles and values. This family of mutual funds rigorously avoids investments that do not match that category. They wouldn’t invest in companies involved with alcohol, anti-family entertainment, gambling, tobacco and similar potentially offensive practices.

3. Impact Funds

Impact investing is a term used to describe an investment approach where ethical improvements or positive results for the community and environment take precedence over fund performance or financial returns. Examples of this include investing in non-profits or businesses producing or using clean technology.

4. Socially Responsible Investing Funds (SRI Funds)

Socially responsible investing entails eschewing investments in contentious industries or companies that manufacture or provide addictive substances or activities or whose products or services go against the principles of social justice, sustainability and clean technology. This is why SRI funds steer clear of businesses involved in gambling, guns and ammunition, tobacco, alcohol and oil.


Pros and Cons of Ethical Investing

Whether you want to start ethical investing in Australia or elsewhere, it’s important to be aware of its pros and cons, so you know exactly what to expect.

Pros:

  • When an ethical holding company performs well, the investor benefits financially and emotionally as the business shares their ideals.
  • Investments in ethical funds have a great potential to increase dramatically as more people become aware of them.
  • The growing relevance and popularity of ethical investing will motivate other companies to raise the bar on their ethical standards in order to attract investors.

Cons:

  • It takes a lot of investigation or due diligence to verify that investing in a business is in line with the investor’s values and views because it is not a passive strategy.
  • Since ethical investment may not offer the best returns, the investor may need to forgo financial benefits in favour of upholding their ethical philosophy.
  • More work and research goes into finding the right investment, so the costs for ethical investing can be higher compared to conventional investments.

That being said, the number of investors who want to make a positive impact on the society and environment is expected to continue growing.

If this article has inspired you to think about your own unique situation and, more importantly, what you and your family are going through right now, please contact your advice professional.

(Feedsy Exclusive)

Superannuation scams – What to do about super scams

If someone offers to withdraw your super or move it to a self-managed super fund (SMSF) so you can access the money, it’s probably a scam.

Learn how to spot a superannuation scam, and where to report it.


How to spot a super scam

Scammers can target you online, by phone or by email.

Signs of a super scam:

  • advertisements promoting early access to super
  • offers to ‘take control’ of your super
  • offers to invest your super in property
  • offers of quick and easy ways to access or ‘unlock’ super

Phishing scams for your super

Watch out for emails or calls requesting your personal or account details. Scammers may pretend to be a company you know, like your super fund, to steal your identity. They may then use this to transfer your super to an account they can access, like a fake SMSF.


Report a super scam

If you think you’ve been targeted by someone who is trying to access your super early, report it to:

Support after a scam

If a scam has caused you problems with debt, talk to a financial counsellor. They can help you get your finances back on track.

If you’ve been scammed and need someone to talk to, contact:


Protect yourself from super scams

There are some simple things you can do to protect yourself from super scams.

Know the rules about your super

Scammers will try to convince you that they can help you to get your super early. Knowing when you can legally get your super protects you from these kinds of scams.

See getting your super.

Check your balance and contact details

Regularly check your super balance by logging into your account through your super fund’s website. If something doesn’t look right, contact your super fund and ask them to explain.

Make sure your super fund has your correct mobile number, email and postal address. This will help them get in touch with you if there’s any suspicious activity on your account.

Take steps to stop identity theft

There are simple steps you can take to help stop someone stealing your identity — for example, shredding your documents, and being careful on social media. See identity theft.

Don’t deal with anyone who is not licensed

A scammer will not have a licence to set up or manage super funds. You can check if someone is licensed on ASIC’s website. Choose ‘Australian Financial Services Licensee’ in the drop-down menu when you search. You can also use APRA’s Disqualification Register to check whether someone has been disqualified.

MoneySmart
(www.moneysmart.gov.au)

Outline: ‘jobs of the future’

Boosting migration has been flagged as “part of the solution” to severe labour and skills shortages by Prime Minister Anthony Albanese.

Mr Albanese also wants domestic workers trained for the “jobs of the future”.

“The skills have changed, so we need to change that training to match the skills,” he told reporters on Monday ahead of the jobs and skills summit next month.

Mr Albanese outlined the 10 professions with the most dire worker shortages, including nurses, chefs, early childhood teachers and electricians.

Construction workers and civil engineers also made the list, as did other caring professions, such as child care workers and aged and disability carers.

Technology will also continue to be a major employer over the next five years, according to government forecasts, with IT business and systems analysts and software programmers rounding out the top 10 list.

To help plug these skills gaps, the government plans to send more than 450,000 people to TAFE free of charge.

Supporting apprentices will also be on the agenda at the jobs and skills summit.

Apprenticeship Employment Network boss Gary Workman said there was a disconnect between labour shortages in trades and high numbers of new apprenticeship starts.

“The treasurer is looking for more efficient ways to do things,” Mr Workman said.

“The obvious place to start would be by ensuring employers are only subsidised for genuine new apprenticeships.”

Workers affected by the clean energy transition will also be on the agenda at the jobs and skills summit.

On Monday, the Australian Council of Trade Unions called for a new national body tasked with overseeing the transition so workers in fossil fuel industries are not left behind.

“A national Energy Transition Authority will ensure that we don’t have to choose between climate action and good, secure jobs,” ACTU president Michele O’Neil said.

The ACTU has also supported a boost to migration to plug skill gaps on the condition domestic workers are first offered improved wages and other benefits.

Commenting on the proposal, Nationals leader David Littleproud said about 170,000 workers were needed in agricultural processing alone.

He said farmers would be less likely to plant crops if they couldn’t find workers, which would limit supply and drive up costs for consumers.

“Every time you go to the checkout, you should see Anthony Albanese’s face on your docket because he’s driving up the cost of your living,” he said.

Mr Littleproud called for improved avenues to bring migrant workers into regions permanently as a solution to labour shortages in agriculture and in regional communities.

He also wants more investment in vocational training in the regions, as well as allowing pensioners and veterans to do more work without losing payments.

Mr Albanese said the government supported the notion of allowing pensioners to do more paid work without losing benefits, and would consider this policy as part of its response to the labour crisis.

The jobs and skills summit will be held in Canberra on September 1 and 2.

 

Poppy Johnston
(Australian Associated Press)

Booms, busts and investor psychology – why investors need to be aware of the psychology of investing

Key points

  • Investment markets are driven by more than just fundamentals. Investor psychology plays a huge role and helps explain why asset prices go through periodic booms and busts.
  • The key for investors is to be aware of the role of investor psychology and its influence on their own thinking. The best defence is to be aware of past market cycles (so nothing comes as a surprise) and to avoid being sucked into booms and spat out during busts. If an investor is looking to trade they should do so on a contrarian basis. This means accumulating when the crowd is panicking, lightening off when it is euphoric.

 

Introduction

Up until the 1980s the dominant theory was that financial markets were efficient – in other words all relevant information was reflected in asset prices in a rational manner. While some think it was the Global Financial Crisis that caused faith in the so-called Efficient Markets Hypothesis (EMH) to begin unravelling, this actually occurred in the 1980s. In fact, it was the October 1987 crash that drove the nail in the coffin of the EMH as it was impossible to explain why US shares fell over 30% and Australian shares fell 50% in a two-month period when there was very little in the way of new information to justify such a move. It’s also hard to explain the 80% slump in the tech heavy Nasdaq index between 2000 and 2002 on the basis of just fundamentals. Study after study has shown share market volatility is too high to be explained by investment fundamentals alone. Something else is at play, & that is investor psychology.


Investor psychology

Several aspects of investor psychology interact in helping drive bull and bear phases in investment markets, including individual lapses of logic and crowd psychology.

Individuals are not rational

Numerous studies by psychologists have shown that – apart from me and you! – people are not always rational and tend to suffer from various lapses of logic. The most significant examples are as follows.

  • Extrapolating the present into the future – people tend to downplay uncertainty and assume recent trends, whether good or bad, will continue.
  • Giving more weight to recent spectacular or personal experiences in assessing the probability of events occurring. This results in an emotional involvement with an investment strategy – if an investor has experienced a winning investment lately he or she is likely to expect that it will remain so. Once a bubble gets underway, investors’ emotional commitment to it continuing steadily rises, thus helping to perpetuate it.
  • Overconfidence – people tend to be overconfident in their own investment abilities.
  • Too slow in adjusting expectations – people tend to be overly conservative in adjusting their expectations to new information and do so slowly over time. This partly reflects what is called “anchoring” where people latch on to the first piece of inflation they come across and regard it as the norm. This partly explains why bubbles and crashes in share markets normally unfold over long periods.
  • Selective use of information – people tend to ignore information that conflicts with their views. In other words, they make their own reality and give more weight to information that confirms their views. This again helps to perpetuate a bubble once it gets underway.
  • Wishful thinking – people tend to require less information to predict a desirable event than an undesirable one. Hence, asset price bubbles normally precede crashes.
  • Myopic loss aversion – people tend to dislike losing money more than they like gaining it. Various experiments have found that a potential gain must be twice the potential loss before an investor will consider accepting the risk. An aversion to any loss probably explains why shares traditionally are able to provide a relatively high return (or risk premium) relative to “safer” assets like cash or bonds.The madness of crowds
    As if individual irrationality is not enough, it tends to get magnified and reinforced by “crowd psychology”. Investment markets have long been considered as providing examples of crowd psychology at work. Collective behaviour in investment markets requires the presence of several things:
  • a means where behaviour can be contagious – mass communication with the proliferation of electronic media are a perfect example of this. More than ever, investors are drawing their information from the same sources, which in turn results in an ever-increasing correlation of views amongst investors, thus reinforcing trends;
  • pressure for conformity – interaction with friends, monthly performance comparisons, industry standards and benchmarking, can result in “herding” amongst investors;
  • a precipitating event or displacement that gives rise to a general belief that motivates investors. The IT revolution of the late 1990s, the growth in China in the 2000s and crypto currencies more recently are classic examples of this on the positive side. The demise of Lehman Brothers and problems with some crypto currencies/markets are examples of displacements on the negative side; and
  • a general belief which grows and spreads – eg, share prices can only go up – this helps reinforce the trend set off by the initial displacement.


Bubbles and busts

The combination of lapses of logic by individuals in making investment decisions being magnified by crowd psychology go a long way to explaining why speculative surges in asset prices develop (usually after some good news) and how they feed on themselves (as individuals project recent price gains into the future, exercise “wishful thinking” & get positive feedback via the media, their friends, etc). Of course, the whole process goes into reverse once buying is exhausted, often triggered by contrary news to that which drove the rise initially.

Investor psychology through a market cycle looks like what Russell Investments called the roller coaster of investor emotion. When times are good, investors move from optimism to excitement, and eventually euphoria as an investment’s price – be it shares, housing, gold, cryptos or whatever – moves higher and higher. So by the time the market tops out investors as group are maximum bullish and fully invested, often with no one left to buy. This ultimately sets the scene for a bit of bad news to push prices lower. As selling intensifies and prices fall further, investor emotion goes from anxiety to desperation, and eventually capitulation and depression. By the time the market bottoms out investors are maximum bearish and many are out of the market. This then sets the scene for the market to bottom as it only requires a bit of good news (or less bad news) to bring back buying, and then the cycle repeats.


The roller coaster of investor emotion through a mkt cycle

Source: Russell Investments, AMP
Source: Russell Investments, AMP

This pattern has been repeated time again over the years: in the early/mid 1990s with emerging markets; the late 1990s tech boom; late 2000s with the focus on credit, US housing; and arguably more recently with crypto currencies and yield plays.


Points to note

Firstly, confidence and investor psychology do not act in a vacuum. The move from depression at the bottom of a cycle to euphoria at the top is usually underpinned by fundamental developments, e.g., strong economic growth and easy money.

Second, at market extremes confidence is best read in a contrarian fashion – major bull markets do not start when investors are feeling euphoric and major bear markets do not start when they are depressed. By the time investor confidence has reached these extremes, all those who wish to buy (or sell) have done so meaning it only requires a small amount of bad news (or good news) to tip investors the other way. So extreme low points in confidence are often associated with market bottoms, and vice versa for extreme highs.

Third, ideally one needs to look at what investors are thinking (sentiment) and what they are actually doing (positioning).

Finally, negative crowd sentiment at market bottoms can tend to be associated fairly quickly with market bottoms reflecting the steep declines associated with panics as a market falls. But during bull markets positive sentiment or even euphoria can tend to persist for a while as it takes investors longer to build exposures to assets than to sell them.


So where are we now in relation to shares?

The next charts shows the US share markets and a measure of US investor sentiment that includes surveys of investment newsletter writers and individual investors and the ratio of puts (options to sell shares) to calls (options to buy). It shows that extreme levels of pessimism tend to be associated with major market bottoms (indicated by the green arrows) and extreme measures of optimism tend to be associated with market tops (red arrows) although, as noted above, sentiment can be less reliable at tops.

Currently, the high levels of optimism seen last year are long gone after the plunge in shares, which left sentiment very negative and now sentiment is still negative but not extreme. If anything, this is mildly bullish from a contrarian perspective but after the rally since June it’s not a strong signal either way.

Source: Bloomberg, Sentimentrader, Investors Intelligence, AMP
Source: Bloomberg, Sentimentrader, Investors Intelligence, AMP


What does this mean for investors?

There are several implications for investors.

  • First, recognise that investment markets are not only driven by fundamentals, but also by the often-irrational and erratic behaviour of an unstable crowd of investors. The key here is to be aware of past market booms and busts, so that when they arise in the future you understand them and do not overreact (piling into unstable bubbles near the top or selling everything during busts and locking in a loss at the bottom).
  • Second, try and recognise your own emotional responses. In other words, be aware of how you are influenced by lapses in your own logic and crowd influences like those noted above. For example, you could ask yourself: “am I highly affected by recent developments? Am I too confident in my expectations? Can I bear a paper loss?”
  • Thirdly, to guard against emotional responses choose an investment strategy which can withstand inevitable crises whilst remaining consistent with your financial objectives and risk tolerance. Then stick to this even when surging share prices tempt you into a more aggressive approach, or when plunging values suck you into a defensive approach.
  • Fourthly, if you are tempted to trade, do so on a contrarian basis. Buy when the crowd is bearish, sell when it is bullish. Extremes of bullishness often signal eventual market tops, and extremes of bearishness often signal bottoms. Successful investing requires going against the crowd at extremes. Various investor sentiment and positioning surveys can help. But also recognise contrarian investing is not fool-proof – just because the crowd looks irrationally bullish (or bearish) doesn’t mean it can’t get more so.
 

Shane Oliver, Head of Investment Strategy & Chief Economist

Top 10 Brilliant Money-Saving Tips

Are you looking to build up your savings for the future but don’t know how or where to start? Check out these money-saving tips you can apply today.

 

Top 10 Brilliant Money-Saving Tips

Whether you’re looking to save money for financial security, investment, a future purchase or retirement, the best time to start doing so is now.

However, saving money takes discipline and commitment. You need to keep your eyes focused on the future. By building up your savings, you can look forward to a more stable financial standing. With money in your pocket or the bank, you’ll also be better able to handle any financial obstacles or difficulties that may come your way.

To get you started, we’re sharing the top 10 money-saving tips you can easily start doing now.

1. Record all expenses.

The only way to know which expenses you can cut back on is by keeping detailed records of your daily, weekly and monthly expenses.

So, make time to record everything (e.g. three months’ worth of expenses) and review it to see what items are non-essential and can be stricken out.

2. Plan your meals.

A whole day of eating out could set you back by around $40 to $65 or more — desserts not included.

You can save a substantial chunk of your budget by opting to dine at home. For this, you need to plan your meals accordingly. By cooking at home, you not only save but also become more aware of the nutrients you’re getting in your diet.

3. Save water and electricity.

Everyone’s been told to save water and electricity at least once in their lifetime because it’s one of the best money-saving tips. Be aware of your water and energy consumption and take steps to conserve as much as you can. This includes unplugging devices and turning off the tap and lights when these are not in use.

4. Declutter and sell.

Once or twice a year, go through your possessions. Make it your goal to get rid of items that you haven’t touched for months (even when their use is not seasonal). Set these things aside and aim to either give them away or sell them.

5. Skip the credit card.

Adopt a mindset of buying only those things you can afford to pay for in cash. Ditch the plastic. If you can, gradually pay off your credit card debt and go plastic-free forever.

6. Make coffee at home.

Whether you’re an espresso lover or an occasional café-goer, it’s better to make your coffee at home. There are so many tips and videos about coffee making available out there. Plus, learning to make your own coffee can elevate your appreciation for it.

7. Create a grocery list and stick with it.

When you set out to shop for your groceries, write down what you need and make sure to stick with it. Carrying cash only (rather than a credit card) can also help eliminate or minimise impulse buys.

8. Bring your own bottle of water.

Instead of spending on expensive bottled water products that also add to the planet’s waste problems, get a reusable water bottle and fill it at home. Take it wherever you go and refill it at work or school.

9. Purchase what you can in bulk.

While giving in to every single sale is not a good thing, you can buy certain items in bulk during sales. These include laundry detergent, pasta, toothpaste, and toilet paper. Just make sure to purchase what you can consume within a reasonable period.

10. Invest in timeless fashion.

Rather than buying what seems to be cheap fast fashion, invest in a few quality pieces that you can wear and mix and match over and over again. 

So there you go, money-saving tips and tricks you can implement right away to help secure your future.

Happy saving!

 

If this article has inspired you to think about your own unique situation and, more importantly, what you and your family are going through right now, please contact your advice professional.

 

(Feedsy Exclusive)

 

Choosing a super fund – How to compare and choose super funds

Most people can choose which super fund they’d like their super contributions paid into. You can go with your existing fund, your employer’s fund, or choose a different fund.

Your employer will give you a ‘standard choice form’ when you start a new job. This sets out your options.


What to look for in a super fund

When you’re comparing super funds, weigh up fund performance and the fees you’ll pay against other factors such as risk, investment returns, services and insurance.

Performance

Compare your fund’s investment performance over at least five years. Consider the impact of fees and costs.

Compare like with like. For example, only compare a balanced option with another balanced option, and try to use the same time period.

Low fees

All super funds charge fees. Fees are either a dollar amount or a percentage, or both. Either way, generally the lower the fees, the better. Fees are usually deducted monthly and also after an action such as switching investments.

Insurance

Super funds typically have three types of insurance for members:

  • life (also known as death cover)
  • total and permanent disability (TPD)
  • income protection

When comparing the default insurance offered by super funds, look for:

  • the premium rates
  • the amount of cover
  • any exclusions or definitions that might affect you

Investment options

Most super funds let you choose from a range of investment options.

Options usually include:

  • growth
  • balanced
  • conservative
  • cash
  • ethical
  • MySuper

Some funds will let you choose the weighting of different asset types or direct investments.

Services

Super funds may offer other services which attract special fees. These can be things like financial advice or arranging to split your super following a separation.


Compare super funds

You can find out about and compare super funds by using:

  • the ATO’s YourSuper comparison tool, an online list comparing MySuper products
  • the product disclosure statement (PDS) for each product offered by a fund
  • super comparison websites offered by private companies

What to do if your MySuper product is underperforming

If you have a MySuper product, your super fund must let you know if it has performed badly under an annual performance test done by the Australian Prudential Regulation Authority (APRA).

To help you make a decision about whether to switch funds and which product to switch to, you can use the ATO’s YourSuper comparison tool.


Comparison websites

Non-government super comparison websites include:

All of these have some information for free. Some of them also offer more detailed information for a fee.

Comparison websites can be useful, but they are businesses and may make money through promoted links. They may not cover all your options. See what to keep in mind when using comparison websites.

Don’t choose a super fund based only on its rating on one of these websites.

Compare these features:

Performance
  • how well the fund has performed over the past 5 years
Fees
  • fees for:
    • administration (includes intra-fund advice)
    • investment
    • buy/sell spread
    • transactions
    • switching
    • personal advice
    • insurance
    • any other fees
  • how often they are charged
Insurance
  • what cover is available
Investment options
  • available options
Services
  • other services the fund offers

Once you have the information you need, use our super calculator to compare how different funds will work for you.

 

If you don’t choose a super fund

If you don’t choose your own super fund, your employer must check with the ATO to see if you have an existing super fund. This is known as a ‘stapled super fund’.

If you don’t have an existing fund (for example if it’s your first job) your super will be paid into a ‘default’ super product chosen by your employer. This is known as a MySuper product.

MoneySmart
(www.moneysmart.gov.au)