Serious about Super

When was the last time you checked to see how your superannuation was performing? Many of us give very little thought to our super until we need it and by then it's often too late.

Considering superannuation is your retirement savings and often the biggest investment you have after your home, it's worth taking the time to find out as much as you can about your fund.

Are you in the right investment option?

Even though your employer contributes money to your fund, you can still choose how you would like your money invested. Most funds offer a variety of investment options but if you don't make a choice your money will be invested in a default option, which may or may not suit your needs.

Knowing how comfortable you are with investment risk, as well as how long until retirement are all important factors in choosing your strategy.

For example, a low risk, low return strategy may work if you are only a few years away from retiring, but if you're further away from leaving the workforce you may want to take on more risk.

How much do you need?

According to the 'AFSA Retirement Standard', a study that benchmarks the annual budget needed in retirement, $40,391 a year ($55,213 for a couple) is required for a comfortable lifestyle and $22,024 ($31,760 for a couple) for a modest lifestyle (updated June quarter 2012).

A 'comfortable' lifestyle is defined as 'involved in a broad range of leisure and recreational activities' and 'a good standard of living'. A 'modest' lifestyle is defined as 'better than the Age Pension, but still only able to afford fairly basic activities'.

Do you have insurance through your super fund?

Most funds include some level of insurance like disability income protection and life insurance but you may find it falls short of the cover you need. There may also be delays in life insurance benefits being paid as these initially go to the fund before being distributed.

Should you consider self-managed super?

Many now believe that superannuation can no longer be relied on as a sole source of funds for retirement. Investing in property and managing your own super through a Self-Managed Fund (SMSF) are alternatives if you are concerned about your super underperforming.

SMSFs provide a wide flexibility in investment choice and give trustees the ability to manage and control their investments. There are also significant tax gains to be had when borrowing through a SMSF to invest in a property.

As your mortgage broker, we can point you in the right direction for professional advice in setting up your SMSF.

If you would like to contact one of our brokers and make a loan enquiry, please click here.