Almost five million Australians are in a dud MySuper fund, unaware that their retirement dreams could be wrecked. But it’s not too late to do something about it. Whether you’re in your 20s, 30s, 40s, 50s or early 60s, we show you how to dramatically boost your savings.
I know plenty of people who are in an awful superannuation fund. I ask them: “Why did you choose it?” The answers vary. Often an employer picked a fund run by a life company or a big bank. Or a financial planner or bank rep recommended a retail fund. Or they went into a default industry super fund that consistently under performed. In some cases, people moved from a really good fund to one of the worst.
It is not uncommon to be in a bad super fund. In fact, 4.6 million Australians with $197 billion in a MySuper account are in a poorly performing fund, according to the Productivity Commission’s review of superannuation. Around 9.8 million Australians are in MySuper funds that perform above a benchmark designed by the commission.
What is alarming is that people don’t realise how much being in a poor fund is costing them and potentially derailing their retirement plans.
Researcher Super Ratings estimates that over a working life of 45 years the difference between being in a top-performing and a worst-performing fund means you could be $337,310 better off. Super Ratings’ data, exclusively compiled for Money magazine, shows the impact of being in the right super fund compared with the worst for different age groups: the 20s, 30s, 40s, 50s and from 60 to 65. The consequences are huge.
Those in the worst fund in their 20s are $19,513 behind people in the best fund (over 10 years). As your earnings increase, your contributions grow, your balance increases and your insurance needs change, the losses would expand to $45,712 for someone in their 30s, $73,316 in their 40s, $116,406 in their 50s and $82,363 for 60- to 65-year-olds. That adds up to $337,310.
While this is a theoretical exercise, it highlights how vital it is to be engaged with your super to make sure you are in a low-cost, top-performing fund throughout your working life.
Denne historien er fra August 2018-utgaven av Money Magazine Australia.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent ? Logg på
Denne historien er fra August 2018-utgaven av Money Magazine Australia.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent? Logg på
An outrageous, beautiful monopoly
Telstra's mobile business is a cash machine with few competitors, giving it the highest returns in the world.
Drop the anchor to judge value
Buying and selling decisions should be based on where a stock price is going, not where it has been.
Powering the AI boom
Beyond the software and chipmakers, where will the energy come from?
Get into life
Tucked inside super are products that can protect you from life's inevitable uncertainties.
Paths to home ownership
Taking the road less travelled can sometimes deliver unexpected benefits.
Sold! Quick ways to add value
Small, strategic changes can have a big impact on the look and feel of your home. And get you a better price on auction day.
Money lessons the kids need to know
Your children can learn a lot from your past money mishaps. Here are eight financial conversations I have had with mine.
Property-investing rules: are they likely to change?
The pressure for the government to curb the tax benefits of tax concessions, such as negative gearing and the capital gains tax discount, is unrelenting. Most recently, independent senators David Pocock and Jacqui Lambie proposed five options for paring back investment property tax concessions, with savings to the Federal budget of up to $60 billion over the next decade.
What's love got to do with it?
A rollercoaster of emotions could be driving poor crypto behaviour.
Are we ready to be cash-free?
Saying goodbye to our piggy banks too soon could leave small businesses in the dark when problems arise.