How well your super is tracking depends on a few key areas: how much you contribute, the amount taken out in investment fees and operating costs, and – critically – your fund’s performance. It’s that straightforward. Why, then, do people take a lackadaisical approach to it?
The simple answer is that so much of what happens in super takes place automatically without much effort on the part of the member. Most people default into their employer’s fund with contributions made on their behalf. But this passivity can come at a cost.
“Contributions come out of what would otherwise be your wages. It is the member’s money and people should never forget that,” says Alex Dunnin, executive director of research and compliance at Rainmaker Group, which publishes Money.
“We don’t actually see it, so people seem to think, ‘I’ve got super and I’ll be okay.’ But you might wonder, ‘Maybe I’m in a great fund – or maybe it’s a dud fund or one that’s ripping me off.’ In some ways it is the Achilles heel of the system but also its greatest strength: it has enabled people to build considerable nest eggs and it has also benefited the broader economy.”
Time squandered in a dud fund has real-life consequences: it will determine what you forgo in retirement income later. The only alternative is to be actively involved and check how your fund stacks up against the rest. Without making such comparisons you’ll be working in the dark.
This story is from the December / January 2021 edition of Money Magazine Australia.
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This story is from the December / January 2021 edition of Money Magazine Australia.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
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