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<\/p>\nIt makes sense to take a close look at your current super fund and consider whether your money could be working harder elsewhere. You still have many years to go until you retire so there could be a way to add thousands of dollars to your final balance.<\/p>\n
Here are five key areas to consider when you\u2019re thinking about the best way to invest your super.<\/p>\n
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Most super funds invest in a mix of cash, fixed interest, property and shares. When you diversify by spreading your money across different asset classes you reduce the overall risk associated with investing your super. This means if one investment performs poorly over a period of time, other investments may perform better, minimising any potential losses.<\/p>\n
The various elements are generally mixed in different ways to offer different levels of risk. They often have names like Conservative, Balanced and Growth and you can choose your mix to match your own risk appetite.<\/p>\n
You also have a choice of what are known as single and multi-manager funds. A single manager fund is overseen by just one investment manager or trading advisor who may be an expert in particular asset classes. A multi-manager fund can deliver diversification by drawing on the expertise of a number of specialists.<\/p>\n
Risk is important but, when you\u2019re considering your mix of investment classes, there are other factors to consider such as:<\/p>\n
your retirement planning goals<\/p>\n<\/li>\n
how much super you\u2019d need to save for retirement to reach those goals<\/p>\n<\/li>\n
your age and how many years you have to invest<\/p>\n<\/li>\n
any other investments you have and the returns you can expect.<\/p>\n<\/li>\n<\/ul>\n
Small differences in the rate of return earned by your super investment can have a significant impact on your retirement savings.<\/p>\n
Unfortunately, it\u2019s impossible to predict performance \u2013 and there\u2019s no guarantee that a fund which performed well in the past will continue to do so in the future. However, APRA, the superannuation industry\u2019s regulator, has developed a\u00a0Standard Risk Measure\u00a0to help you compare the risk of investment options in a superannuation fund.<\/p>\n
Most super funds include life insurance and many add total and permanent disability insurance and\/or income protection also known as salary continuance. The premiums are deducted automatically from your super balance and can be lower than those outside super.<\/p>\n
When you\u2019re considering a new fund you should check the cover provided, whether it\u2019s enough for your needs and, if not, whether there\u2019s an option to increase the level of cover. You should also check whether you can transfer your current level of cover. This is particularly important if you have a pre-existing medical condition.<\/p>\n
You can check and compare the details by reading the product disclosure statement on each super fund\u2019s website.<\/p>\n
With some limited exceptions, super funds give you the option of moving your money into a fund of your choice. This gives you more control over your super and also gives you the opportunity to consolidate all of your super balances into one account so you\u2019ll pay fewer fees and charges.<\/p>\n
However, you may want to check whether there are costs involved or if you lose some benefits with exiting a fund or switching investment options within the fund before deciding on where to invest your super. Also, if you intend to claim a tax deduction for certain personal contributions made into your existing fund, it\u2019s important to ensure your \u2018Notice of intent to claim a deduction for personal contributions\u2019 is made and acknowledged by that Trustee before you change funds.<\/p>\n
Whichever fund you choose, it\u2019s a good idea to keep an eye on how your investment is performing as well as any fees or costs. By law, your super fund must send you regular statements with details including:<\/p>\n
your balance at the start and end of the period<\/p>\n<\/li>\n
details of deposits from your employer and any other contributions you may have made<\/p>\n<\/li>\n
how much interest your investments have earned<\/p>\n<\/li>\n
level of insurance cover<\/p>\n<\/li>\n
any fees or costs.<\/p>\n<\/li>\n<\/ul>\n
You may also be able to keep track of your super online through your internet banking account.<\/p>\n
Remember that visibility works both ways \u2013 it\u2019s important to keep your fund up to date with your current contact details<\/p>\n