Your annual superannuation statement should have arrived recently, or be on its way any day now. We know that for many it can be a chore to manage your superannuation, but small changes now, can result in a big difference when you retire. Take 5 minutes to engage with your future financial wellbeing and have a look at our super health check below.
What should you look out for and consider when assessing your super?
Returns are compounded, meaning the returns you earn today will earn returns tomorrow. So the more you have invested yesterday, the more return you will earn in dollars today, and therefore the more tomorrow, all else equal. All this is just a way of saying the more you can contribute to your super earlier, the better you will be in retirement. So have you considered additional contributions? You can learn more about this in these Superannuation strategies for the end of financial year.
Just like returns are compounded, so too are fees. So make sure you are aware of and comfortable of the fees your fund charges, and how they compare to competitors.
Have you minimised the number of super accounts you have? Most super accounts charge some portion of the administration fee as a fixed fee, so the more accounts you have, the more fees you’re paying and the less you’ll have to retire on. Don’t forget the compounding effect of these multiple small fees over many years before your retirement!
The current track you’re on will help inform decision making. Moneysmart’s superannuation calculator is a useful resource for measuring this, as well as the impact that changes will have on your balance at retirement. We’re currently working on a more detailed retirement calculator and look forward to letting you know once this is available.
The Moneysmart website also has a good guide for things to look out for when thinking about your super.
Are you using the right super product given your position in life?
Superannuation is a long term investment, so if you are going to maximise growth, which means potentially more volatility, then it is better to do it when you have longer to invest.
This also means that as you near retirement, it is crucial to ensure your portfolio is starting to protect against big swings in markets to ensure your retirement is not adversely affected at the worst possible time. Are you in the appropriate product mix given your situation?
Do you know what’s happening within your super fund?
As we have spoken about in the past, many super funds compete on fees, but in doing so, give you a product and service level which is opaque to say the least.
When choosing a super fund, consider:
- Do you know what assets are being held on your behalf?
- Are you invested in sectors or asset classes you don’t want to be in? For example property or Australian banks. Does knowing matter to you?
- Does your account contain unlisted (illiquid) assets? Are you aware of the way they are being valued?
Is your superannuation fund reflecting your ethical beliefs?
When considering ethical investing, it would be prudent to ask yourself the following:
- Does your fund provide ethical investing opportunities?
- Do those ethical options actually reflect/match your ethical beliefs?
- Do you understand the complexities of ethical investing?
How Nucleus Wealth offers ethical superannuation for clients
At Nucleus Wealth, we decided the best way for our clients to reflect their ethical preferences was to allow everyone to choose their own ethical screens; as what’s ethical to me, may not be ethical to you. These screens allow clients to tailor their portfolio to filter out stocks that don’t meet their personal ethical standards.
We facilitate ethical investing through tailoring your portfolio in our superannuation accounts, without needing an Self Managed Super Fund (SMSF).
Shelley George is Head of Operations at Nucleus Wealth.
The information on this blog contains general information and does not take into account your personal objectives, financial situation or needs. Past performance is not an indication of future performance. Nucleus Wealth Management is a Corporate Authorised Representative of Nucleus Advice Pty Ltd – AFSL 515796.