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Three things to consider when switching your super

Understanding how your super works and ensuring you get the most from your fund are essential to achieve the retirement lifestyle you envision.

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Three things to consider when switching your super

The superannuation guarantee is a percentage of your income put aside by your employer over your working life to help you fund your retirement.

It’s easy to forget sometimes that superannuation counts as investing and is in fact one of the most important long-term investments Australians will ever make, particularly as super is now the second largest component of household wealth after property assets and still the foundation of retirement savings.

Understanding how your super works and making sure you are getting the most out of your fund is therefore essential to growing your wealth and ensuring you can live the retirement lifestyle you envision.

Choosing a super fund and investment option may seem daunting, or simply just not on your radar as retirement may seem too far in the future to think about now. The danger with this however is that if you don’t select a super fund for your employer to pay contributions into, you could end up defaulting into a fund that is underperforming or end up with several funds on which you’ll have to pay individual fees. This will impact your superannuation balance in the long run.

1. What kind of investor are you?

Consider first what kind of approach you’d like to take toward your super as this can then help inform which investment offer you select. For example, are you more of a hands-off investor who prefers to leave investment decisions like asset allocation and rebalancing to your super fund’s investment experts? Or are you more hands-on and would prefer to mix and match investment options to build a super portfolio that’s unique to you?

For those who prefer a hands-off approach, most super funds offer a MySuper default option that usually invests in a single diversified fund or a lifecycle offer. These default options are designed to be simpler, balanced, more cost-effective and less maintenance.

MySuper option for example is called Lifecycle and is designed to automatically adjust your investment mix according to your age, allowing you to set and forget.

Vanguard Super also offers a choice menu for more confident investors who would like to select from a range of single sector and diversified investment options to build their own portfolio according to their goals and risk tolerance.

2. Compare your options

As with all investing, doing your own research or consulting a licensed financial adviser is important. When selecting or switching super funds, there’s a range of factors you could consider including investment options, investment performance, insurance, user experience, and importantly, fees.

There are a few tools online that can help you easily compare super funds and find one that best suits your circumstances. The MoneySmart website created by the Australian Securities and Investments Commission is a great place to start, as well as the Australian Tax Office’s YourSuper comparison tool.

3. Understand your fees

The long-term impact of fees on superannuation balances can be significant if left unchecked. New research from Vanguard Australia revealed that 1 in 2 Australians don’t know what they pay in annual fees.

According to analysis conducted by the Productivity Commission, just a 0.5% increase in fees could cost a typical full-time worker around $100,000 by the time they retire.

That’s why it’s critical to not only understand your fees but also make sure your fund is low cost.

 

 

 

Vanguard
March 2024
vanguard.com.au

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Louise Laing

Louise founded Salus Private Wealth to offer high quality personal advice to clients who want to work closely with an adviser for the long term. Her philosophy that understanding each individual and their motivations and needs is key to an enduring and successful financial planning relationship is at the heart of the business.

She first engaged the services of a financial adviser herself when she was in her early 20s (long before becoming one) and believes the non-judgemental support and education about her position and options provided at this early stage has allowed her to make confident decisions in different aspects of life since then.

This confidence and positivity in making choices, financial or not, is what she wants to give to her clients.

Superannuation & Retirement

Superannuation is one of the largest and longest duration investments most people in Australia have, making it a critical part of long-term planning even if retirement feels like a distant objective. For those in the lead into retirement, we design strategies so you have peace of mind that when you start to draw on your retirement savings, you have liquidity and stability to support that.

Legislation and rules are changed regularly, so advice can help you take advantage of opportunities to build for the future. We are authorised to provide advice on and to SMSFs.

Contact us today to discuss how we can work together: (02) 8044 3057 or email us at info@saluspw.com.au

Insurance

Protecting your wealth, lifestyle and family is high on the priority list for many clients and this is an area of advice need that can change very quickly. Ensuring you have the cover you need can give peace of mind that what’s important is taken care of in the event of illness, injury and death, but we also make sure over time you are not paying for cover you no longer need.

Contact us today to discuss how we can work together: (02) 8044 3057 or email us at info@saluspw.com.au

Estate Planning

While talking about death doesn’t seem like a particularly appealing prospect, it’s a topic we see as a vital part of financial planning. Importantly, it’s a topic for every adult, regardless of their stage in life. Without a proper estate plan assets may not be passed where you’d like them to go, family conflict can ensue, and in the event you lose capacity there may not be an authority in place for the person you would choose to make those decisions for you to do so. While it can be an uncomfortable subject, we are experienced in facilitating these conversations as part of our advice process.

Contact us today to discuss how we can work together: (02) 8044 3057 or email us at info@saluspw.com.au

Strategic Debt & Cashflow

Managing debt efficiently can have a material impact on your financial wellbeing and lifestyle. Having a solid plan to understand where your money goes and manage cashflow and debt can eliminate stress and set you on a positive path toward achieving your goals.

Contact us today to discuss how we can work together: (02) 8044 3057 or email us at info@saluspw.com.au

Investments

Once we have a clear understanding of what we are aiming for and how you feel about taking on investment risk, we can help direct your funds into appropriate investments to meet your goals. This includes recommending the investment structure, consideration of tax implications, asset types, and putting together a suitable blend for you. You will have transparency of and access to view your investments, providing security.

Contact us today to discuss how we can work together: (02) 8044 3057 or email us at info@saluspw.com.au

Aged Care

Aged care needs can arise suddenly. The complexity of managing this can be a significant challenge at a time when your focus should be on the person requiring care. We can assess the alternative funding options to ensure you make an informed choice in the best interests of the person requiring care.

Contact us today to discuss how we can work together: (02) 8044 3057 or email us at info@saluspw.com.au

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The Trustee for Laing Weaver Family Trust T/A Salus Private Wealth (Corporate Authorised Representative No. 1305571) and all our advisers are Authorised Representatives of Finchley & Kent Pty Ltd, Australian Financial Services Licence No. 555169, ABN 50 673 291 079, and has its registered office at Level 63, 25 Martin Place, Sydney NSW 2000.

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