Busting Super Myths

We often see people put Superannuation in the ‘too-hard basket’ and assume all will be fine when it comes time to retire. You can’t afford to be complacent these days. Your financial future depends on it. Take a look below where we bust the 4 super myths and set the record straight.

1. I have no control over my Super!

The Super landscape has changed considerably since compulsory superannuation was legislated in 1992. New laws introduced in 2005 saw Australian workers able to choose a super fund for their retirement savings, rather than a fund specified by their employer.  Since then we’ve also seen self-managed super funds (SMSF) grow in popularity. Today there is also a greater choice of retail and industry super funds, varied investment options, and more control than ever.

Where there once used to be limited investment options, many funds now offer a varied range that goes beyond conservative, balanced, and growth. Some even often a pseudo-SMSF option where you have control over direct investment in shares, exchange traded funds, or term deposits.

For even greater control over your investment strategy, you may wish to consider a self-managed super fund (SMSF). These aren’t for everyone so it’s best to engage a professional advisor to discuss your options.

2. I don’t have to worry about Super yet, I’m years away from retirement.

No doubt you’ve heard the saying “Time in the market, not timing the market”. Now is the time to pay attention to your superannuation. Give your retirement savings a boost with the benefit of time.

It’s important to consider your current age, your expected retirement age, and your risk profile when making decisions regarding your super. Whether you’re 10 years from retirement or 30 years – investing time now to consider your super options, will pay off when you retire. A long-term approach enables your investment to ride out the natural cycles of highs and lows rather than relying on hope and chance that makes markets and economies perform outstandingly well over a short period of time.

We go into more detail here about why focusing on your Super now will mean huge benefits for your future.

3. I’ll keep my super in a few funds for diversification.

Although diversification is widely talked about in the finance space, it isn’t generally used when discussing how many super fund accounts a person should have. By maintaining several accounts, you’re likely paying administration fees that are easily avoided.

Many funds now offer extensive diversification within their investment categories. And some even allow direct investment as we mentioned above.

Consolidating your super means you will enjoy fewer fees and less paperwork. Many super funds also offer various insurances as part of their accounts so it’s important to review your needs and eligibility before consolidating.

You should also consider any investment or tax implications when reviewing your super. Let us help you review your funds to get the best outcome for you.

4. I’ll lose my money if the market crashes

Investing based on your risk profile is important for peace of mind. However, it is important to know that your risk profile may change depending on your age, your personal circumstances and how long you have until retirement.

There is a wide range of investment options in super funds that reflect the different risk profiles of members.

Your skilled financial adviser can explain these to you and help you better understand what it means to you. With the help of your experienced financial adviser, you can view fund performance and market reports and be in a more confident position to choose how you would like your retirement savings invested.

By taking a proactive and more educated approach to your super, your investment strategies can be better managed as your risk profile changes through your life. For example, this may mean re-evaluating your risk and reducing exposure to volatile markets as you get closer to retirement.

It’s important to make sure your super is working for you. Speak to one of our super experts and find the best ways to boost your retirement savings here.

IMPORTANT INFORMATION: This blog has been prepared by Modoras Pty. Ltd. ABN 86 068 034 908 an Australian Financial Services and Credit Licences (Number 233209). The information and opinions contained in this presentation is general information only and is not intended to represent specific personal advice (Accounting, taxation, financial, insurance or credit). No individuals’ personal circumstances have been taken into consideration for the preparation of this material. Any individual making any investment or borrowing decisions should make their own assessment taking into account their own particular circumstances. The information and opinions herein do not constitute any recommendation to borrow funds or purchase, sell or hold any particular investment. Modoras Pty Ltd recommends that no financial product or financial service be acquired or disposed of, credit contract entered into or financial strategy adopted without you first obtaining professional personal financial advice suitable and appropriate to your own personal needs, objectives, goals and circumstances. Information, forecasts and opinions contained in this blog may change without notice. Modoras Pty. Ltd. does not guarantee the accuracy of the information at any particular time. Although care has been exercised in compiling the information contained within, Modoras Pty. Ltd. does not warrant that the articles within are free from errors, inaccuracies or omissions. To the extent permissible by law, neither Modoras Pty. Ltd. nor its employees, representatives or agents (including associated and affiliated companies) accept liability for loss or damages incurred as a result of a person acting in reliance of this publication.