There are two major problems with super funds in Australia, which are costing Australians $3.9 million per year.

1. People usually have multiple super funds
2. People have their super in chronically underperforming funds

Let’s start with the first problem.

Each super fund account has annual fees and default insurances automatically attached to the fund. All of the insurances have annual premiums that you pay out of your super balance. This means that if you have multiple funds you are paying multiple fees and multiple insurance premiums. You wouldn’t have comprehensive car insurance with NRMA and GIO for the same car, so why would have that in super? Why don’t we care about our super, as we care about other things? We don’t normally take much notice of our super fund because it’s not money we can access right now. And if we could access it, most of us would and probably spend the money on something meaningless or to pay off our afterpay accounts.

Secondly, people stay with chronically underperforming funds. How do you check the performance of your super fund? What do you compare it to? How do you compare the funds? I know when I’m talking to some customers about home loans, sometimes the littlest of margins in their interest rate is important to them or when a bank increases their rates by 0.14% people are very upset and look to change banks because of the rate increase, but no one really cares if their super fund has consistently underperformed. Australia’s super industry body, the Association of Superannuation Funds of Australia (ASFA) , calculated in 2016 that the average superannuation balance required to achieve a comfortable retirement would be $640,000 for couples and $545,000 for singles, I personally think it needs to be more, but if that’s the case, then why don’t we take more care about our super? When you retire, your super fund balance will be impacted by the decisions you make today. Things to consider are the fees that your superfund charge, the performance of your super fund and the insurances in your super fund. You can check this all yourself or we can check this for you, but whatever you choose to do, please take care of your retirement fund as this may be one of your biggest assets.

The median superannuation growth investment option gained 10.8% in value for the 12 months to December 2017.

How did your superfund do?

We’re offering complimentary Super Health Checks where we can compare your super (or multiple supers) against the market. This takes approximately 15 minutes. You can schedule a time by just replying to this email.

Countries get one chance in history of putting into place a savings retirement scheme on the scale of the Australian superannuation system. Paul Keating

Thank you for reading.