Superannuation has had a hard time since 2008 when high returns (in excess of expectations) came to a halt. Recovery is still in process and there are those who feel that returning to the age pension system is the best way. Is superannuation still a smart way to save for retirement?
Comparing our present situation with that of less than 30 years ago when superannuation was available to only a small minority and the majority had a very limited retirement pension, we begin to appreciate the initiative of those who changed the system. Other places in the world still have to struggle to care for their retirees with the limited resources available to them in the wake of the global financial crisis.
Australia has a healthy superannuation pool of $1.4 trillion which is growing faster than GDP even in the aftermath of the global financial crisis. This is enough to ensure a good retirement for millions of Australians, much better than could have been expected under the previous system.
Looking to the future the super fund sector wants the same innovative thinking to be brought to bear on the challenges ahead. It is important to find ways of increasing savings either by advising members financially or by minimising the fees. As for the risks on the global market, they believe that using initiative in alternative investment strategies and investment in the right type of infrastructure could reduce the risks. That is where self-managed super funds come in. With their low management fees and flexible investment options, super funds provide investors with new and creative ways of saving for retirement.
Nevertheless, our attitude toward super should be to see it as more than just a means to save for retirement. The $1.4 trillion that we have at present is being used and is working in infrastructure, business and jobs with the prospect of more as time passes. Super money ought to be used for long term investments that will help the economy.
To start your own super fund it is important to get engaged and be informed so you can make informed and intelligent choices. Check your fund`s performance by comparing it with other funds as this can be a good indication. The next thing to do is to get financial advice on your super fund investments.
Remember that super is even now the most tax -effective way to invest in fact you will probably pay 15 % on your contributions and investment earnings. In spite of the uncertainty of financial markets, analysts predict most super fund members will see a positive financial return on their annual statements for a third consecutive year.