Your Australian superannuation fund will probably be the second biggest asset you accumulate in your lifetime, second to the family home, and the choices you make currently can create a big difference to the scale of your nest egg on retirement. Thinking about your super after you’re retiring is sometimes too late, you could be creating the proper choices now.
You ought to always check your superannuation fund’s product disclosure statement. This document sets out the details of your policy, including whether or not you’ve got any insurance cowl, how expensive the premiums are and any entry or exit fees that may apply.
There are some standard choices that a lot of investment managers tend to counsel on where to take a position with your super, however ultimately you would like something that’s simply right for you and suits your desires. Of the thousands of choices out there, there is a minimum of one right option looking forward to you.
The added complexity regarding selecting a superannuation fund is that when you’ve determined on one, you then want to elect your investment choices at intervals that fund (provided you have got the flexibleness in that fund to try to to therefore). Ought to you invest into high growth or balanced? Should you have got a lot of or less Australian shares? What about overseas exposure?
The value of trailing commissions charged to your superannuation fund [http://annualrefund.com.au/] balance or investment is usually between 0.4% – 1.2% of your investment or super/pension fund balance. This may not sound like a lot when it is phrased in % terms, however take into account a 1% per annum trail commission fee on a two hundred thousand dollar super balance or investment is $2000 per annum or $160 a month. Additionally, because they are a % equivalent fee, the more cash you have invested, the more fees you will pay.
Unfortunately home renters do not fare as well as house owners in retirement, particularly single renters, because most home owners can own their homes outright and won’t have on-going housing costs. Research shows that on average, renters can expect to be 17 per cent worse off than house owners in retirement.
How can you tell if you’re paying a trailing commission to your advisor? One means is to ask the advisor. If they’re ethical, they’ll in all probability answer the question in an exceedingly straight-forward manner. However if you’d rather do your own homework and realize out on your own, take into account reading the investment prospectus. And specifically take a gander at the footnotes beneath the heading Management Fees.