SUPERANNUATION

The face of superannuation is changing all the time. You now have greater choice than ever as to where your super goes. If an SMSF is not what you are after but you still want the flexibility to be able to own a wide range of assets there are plenty of super funds to choose from. At WRS our choice around superannuation funds is vast and wide. A couple of tips to consider.

When choosing a fund determine if it has the range of assets that you want to invest in. Choosing a fund based on price might limit your growth options long term. Choose a fund that offers all the different investments you might want to use. Now it is true that generally, more complex super funds (in terms of offerings), cost more to run but this is generally balanced by offering the greater potential for growth. When choosing a fund do not just think now, think 20 years from now.

How do we get money out of superannuation?

I think even when you are eligible, you should think very carefully about pulling money out of super. It is becoming harder and harder to get money into super and easier to get money out (especially if you are over 60 years of age).

What does this tell you?

It tells you that the tax office are happy for you to pull it out, but want to limit what you put in. Once again, get advice to ensure that there is not some other way that your goals could be achieved by leaving money in the super system. Its hard to get it back in. Talk to a WRS adviser today about our superannuation options.

There is an idea out in the community that superannuation is an investment of its own. It is spoken about as if it were an investment. This is inaccurate and I will tell you why. Superannuation is a vehicle. It’s not an investment.

If you had a super fund and the only investment it had was cash this would be the same as having your money in the bank. The investment would pay you whatever the cash rate was. In this instance the cash is the investment, not the superannuation. So your decisions around what you do with super starts with the investments you choose.

Another example, If the Australian share market made a 20% return in a year and your superannuation was made entirely up of these then guess what your superannuation returned? That’s right it returned 20%, but it was not your super, it was the shares in your super fund.

As I said, super is just a vehicle that carries whatever assets you choose (or in most Australian’s case, do not choose). The first lesson I wanted to preach was , take ownership of your super and choose where you want the money invested.

The face of superannuation is changing all the time. You now have greater choice than ever as to where your super is invested. If an SMSF is not what you are after but you still want the flexibility to be able to own a wide range of assets there are plenty of super funds to choose from. At WRS our choice around superannuation funds is vast and wide. A couple of tips to consider.

When choosing a fund determine if it has the range of assets that you want to invest in. Choosing a fund based on price might limit your growth options long term. Choose a fund that offers all the different investments you might want to use. Now it is true that generally more complex super funds in terms of offerings cost more to run but this is generally balanced by offering the greater potential for growth. When choosing a fund do not just think now, think 20 years from now.