Evaluate whether you’re getting the most from your superannuation with this complete guide!
When it comes to preparing for retirement, your superannuation is one of the most powerful financial tools you have. But are you making the most of it? With over $3 trillion in Australia’s super system and more than 100 different funds to choose from, it’s easy to feel overwhelmed. So how do you know if your super fund stacks up?
Fees Matter
One of the most significant factors in determining whether your super fund is working for you is the fees it charges. While every fund has administrative fees, investment fees, and insurance costs, some funds charge more than others. Over time, even small differences in fees can impact your balance significantly.
Do a comparison of your fund’s fees with other funds. ASIC’s MoneySmart website offers a Superannuation Fee Comparator that allows you to see how your fund measures up. If your fees seem high, it might be time to reconsider.
Investment Performance
Your super’s investment performance is another critical factor in assessing its value. Most super funds will offer a range of investment options based on risk tolerance, from conservative to high-growth options.
How has your fund performed over the last 5, 10, or even 20 years? While past performance isn’t a guarantee of future returns, it does give you a sense of how well the fund has navigated market fluctuations. Review the performance data on your fund’s website or through comparison tools like SuperRatings or Chant West to ensure your investments are on track.
Does It Align with Your Values?
With many super funds now offering ethical investment options, you can also consider whether your money is being invested in ways that align with your personal values. This is becoming increasingly important to Australians who want their retirement savings to contribute to industries they believe in—whether that’s renewable energy, social causes, or avoiding harmful industries like tobacco or fossil fuels.
Many super funds now list their investments publicly, so it’s worth checking if your fund aligns with what matters most to you. The Responsible Investment Association Australasia offers resources to help you compare funds with an ethical focus.
Insurance – A Hidden Cost?
Most super funds offer automatic life insurance, Total and Permanent Disability (TPD) cover, and income protection. While having insurance through your super can provide peace of mind, it can also eat into your balance if the premiums are high or unnecessary.
Take the time to review your insurance cover. Is it the right amount for your needs? Is it something you could get cheaper outside your super? Understanding these factors will help you avoid unnecessary deductions from your super balance. ASIC’s Moneysmart also offers a guide on super and insurance.
Are You Engaged?
The final question to ask is: how engaged are you with your super fund? Many Australians treat super as a “set and forget” asset, but the more involved you are, the better the outcome is likely to be. Does your fund provide tools to help you manage your retirement savings? Do they offer educational resources to improve your financial literacy?
Being proactive about your superannuation can lead to better outcomes in retirement. If your fund isn’t giving you the support you need, it might be time to find one that does. And when planning for the next stage of your life, here are the Five Money Tips Things to Consider Before You Retiring. And learn if you should get insurance through your superannuation fund here.
