12 February 2024
Not all super funds are created equal. Industry super funds and retail funds charge very different fees, investment performance can vary significantly between funds, and so can insurance cover. The fund you choose to be with can make a noticeable difference to your retirement balance, as AustralianSuper member Lynnsy discovered.
Lynnsy wasn’t always with AustralianSuper. But a rude awakening when applying for a bank loan to renovate her home showed Lynnsy the importance of choosing a fund with a proven history of long-term performance1. After some research she learnt how this could have a substantial impact on her retirement income.
Watch Lynnsy’s story and see how she got her super back on track with AustralianSuper.
Choosing a better super fund - Lynnsy’s story
-
Show Transcript
My name is Lynnsy McKay and I’m 57 years old.
So about 10 years ago I went for a loan at the bank for some renovations we were doing on our home.
And the bank manager actually turned to me and said, and I, and I quote because I remember every word that he said, ‘I don’t know how long you’ve been working, but this is the worst super I’ve ever seen.’
Which was a rude awakening to me. I’d never taken that much notice about super, but that, that certainly woke me up. And the difference between my super, from then to now is streets apart.
With AustralianSuper you do have options.
One of those options is the account based pension. Which means that your money is still being invested for you, but you can draw down on it as an income.
So you don’t have to take out things like bulk amounts out of your super if that makes you a little nervous and, and you know, you still want to have that, that sort of nest egg for the future as well.
The fact that we needed to have a Royal Commission, I just don’t think, you don’t know what you don’t know. And I think the biggest thing is to inform people and let them understand what they should be doing for their future.
Cause you just don’t think about it when you’re younger.
You perhaps think about buying a house, you perhaps think about the car, and you know the travel and all the things you want to do in your life up to a certain point.
But you don’t often think about afterwards, and it seems so far away but it, it’s actually not.
And your super could be potentially earning hundreds of thousands of dollars up until the point you retire and after you retire, if you want to plan for your future. Its critical, do it now.
Retirement seems so far away but it’s actually not. And if you want to plan for your future – which is critical – do it now.
What to look out for when comparing super funds
If you’re comparing super funds, there are a few things to keep an eye out for to make sure you’re comparing apples with apples.
Competitive fees
Your fund will charge you fees to manage and invest your money. The amount of fees you’re charged depends on a couple of factors, such as your investment option and the type of fund you’re with, for example, an industry or a retail fund. Industry super funds are run for members’ benefit. AustralianSuper is a profit-for-member fund. This means we don’t pay profits or dividends to shareholders, so profit we make goes back into the fund for the benefit of members.
The amount of fees you pay over the course of your working life can add up. This can have a significant impact on your overall super balance come retirement. AustralianSuper’s admin fees are low3. Lower fees means more of your super stays invested to grow for your future.
READ MORE ABOUT AUSTRALIANSUPER’S FEES AND COSTS
Long-term investment performance
When you’re looking at different super funds, it can be important to compare long-term performance. After all, super is a long-term investment. So be sure to check not just how the fund is performing now, but whether it has a good track record.
COMPARE AUSTRALIANSUPER WITH OTHER FUNDS
Net benefit – a measure of how your fund’s performing
Net benefit is what you get when you calculate investment performance, minus the fees, costs and taxes charged by your fund. It’s essentially a truer reflection on how your super is performing, meaning, the higher the net benefit, the more your balance grows.
READ ABOUT: NET BENEFIT AND WHY IT’S IMPORTANT TO YOUR SUPER
The difference between my super, from then to now is streets apart.
A fund to support you in retirement
Choose a fund with retirement options which continue to support you when you stop working, or choose to transition to retirement.
AustralianSuper’s account based pension, Choice Income, is an award-winning account2 with strong long-term performance1. It keeps your super invested for potential growth. An account based pension could help your super grow in retirement, while still giving you access to your savings.
READ MORE: HOW INVESTING IN RETIREMENT CAN HELP GROW YOUR RETIREMENT INCOME
Speak to a financial adviser
Before changing super funds, it can help to speak to a professional financial adviser4. They can help give you advice on how any potential switch might impact things such as insurance.
Sources:
- AustralianSuper Balanced investment option compared to the SuperRatings Fund Crediting Rate Survey - SR50 Balanced (60–76) Index and SRP50 Balanced (60-76) to 31 December 2023. Investment returns aren’t guaranteed. Past performance isn’t a reliable indicator of future returns. Returns from equivalent investment options of the ARF and STA super funds are used for periods before 1 July 2006.
- AustralianSuper received the Canstar Outstanding Value Award – Account Based Pension in 2018 - 2023. Awards and ratings are only one factor to be taken into account when choosing a super fund canstar.com.au/star-ratings-awards/superannuation
- Accumulation - Source: Zenith CW Pty Ltd (Chant West) (ABN 20 639 121 403). Chant West Super Fund Fee Survey June 2023. Survey compares administration fees and costs for MySuper products for a $50,000 balance. Other fees and costs apply. Fees may change in the future which may affect the outcome of this comparison.
Choice Income - Source: Zenith CW Pty Ltd (Chant West) (ABN 20 639 121 403). Chant West Pension Fee Survey June 2023. Survey compares administration fees and costs for multi-manager growth options (61-80% growth assets) for a $250,000 balance. Other fees and costs apply. Fees may change in the future which may affect the outcome of this comparison. - Personal financial product advice is provided under the Australian Financial Services Licence held by a third party and not by AustralianSuper Pty Ltd. Some personal advice may attract a fee, which would be outlined before any work is completed and is subject to your agreement. With your approval, the fee for advice relating to your AustralianSuper account may be deducted from your AustralianSuper account subject to eligibility criteria.
Tags:
This may include general financial advice which doesn’t take into account your personal objectives, financial situation or needs. Before making a decision consider if the information is right for you and read the relevant Product Disclosure Statement, available at australiansuper.com/PDS or by calling 1300 300 273. A Target Market Determination (TMD) is a document that outlines the target market a product has been designed for. Find the TMDs at australiansuper.com/TMD. AustralianSuper Pty Ltd ABN 94 006 457 987, AFSL 233788, Trustee of AustralianSuper ABN 65 714 394 898.