December 18, 2017

Different Types of Super Funds

How much do you need to live comfortably upon retirement? When it comes to planning for retirement, you can ask an expert for superannuation advice so you can better understand the process. You can also use a superannuation calculator to give you an idea of the amount you need to contribute regularly for your super fund.

Retirement planning can be done as early as possible. There is a wide selection of super funds to choose from, so don’t be tempted to get the first one that you’ll see. Each type has its own features, and knowing your options can make the selection process easier. Here are the different categories of super funds:

MySuper

If you’re employed and you haven’t chosen your own super fund, your employer will pay contributions to your MySuper. It offers lower fees options when it comes to single or life stage investments, and life insurance on an opt-out basis. MySuper also has simple features wherein you don’t have to pay for services that you don’t need.

Retail funds

Banks and investment companies operate retail funds which offer a lot of investment options.  These are normally accumulation funds which can range from low-cost or MySuper up to high cost.

Industry funds

These are usually low to mid-cost funds, though some offer MySuper accounts. Unlike retail funds, industry funds have a smaller number of investment options. Most of these are accumulation funds. However, there are several older funds that have defined benefit members.

Self-managed super funds

For those wanting to manage their own superannuation, they usually do this via a self-managed super fund (SMSF). It is regulated by the Australian Taxation Office. This private super fund can have up to four members who are all trustees and are in-charge of making sure that the SMSF complies with laws associated with it.

Public sector funds

These are designed for employees of the departments of the Federal and State government.  This super fund offers low fees and a modest range of investment options. Some also offer MySuper accounts. New members of public sector funds are in an accumulation fund, while long-term members have defined benefits.

Corporate funds

Employers run corporate funds which offer a range of investment choices. These are usually low to mid-cost funds. Most members are into accumulation funds, while the older corporate funds come with defined benefit members.

Got other ideas on superannuation in Australia? Share your tips on retirement planning in the comments section. 

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How to Make Sure You have Enough Retirement Money to Take Overseas Trips

After many years of working full-time, most, if not all, Australians look forward to retirement. It’s the time when people relax, go on a vacation, and spend time with loved ones. This is a time to do whatever it is that you want to do but have no time or even resources to do so while you’re still working.

Of course, your salary will stop coming in once you retire, so it’s really important to save money and plan for retirement to ensure a comfortable life. But how can you make sure that you have enough retirement money for things that you want to do such as overseas trips? Here are several things to consider when planning for retirement:

Know how much superannuation you’ll need

This serves as the main source of income for retirees. In retirement planning, consider your future lifestyle needs. For instance, taking a vacation overseas costs money. You also need to consider future costs such as medical expenses. Make sure to have a clear vision of what you want to do so you’ll know how much superannuation you would need to maintain your lifestyle.

Use a superannuation calculator

This can give you an estimate of how much super is enough to keep the lifestyle that you want.

Update your superannuation fund

If you think that your current funds may not be able to meet your desired target, you may want to update your superannuation by increasing your regular contributions and/or finding competitive rates. The higher the interest rate, the more money you’ll have when you retire.

Consider investment options

Superannuation is not the only financial source for when you retire. You can ensure that you have enough retirement money for overseas trips by having other investment products to increase your savings.

Create a budget

When you have a budget, you’ll know how much money you’ll need and allocate funds to what you want to do. Budgeting can give you peace of mind, not worrying about whether there’s enough money to enjoy retirement.

Retirement planning should be done as early as possible so you’ll have more time to increase your superannuation and savings in general. You may also want to seek superannuation advice from professionals to better guide you on what to do to ensure that you’ll have enough money for overseas vacations and other activities that you want to do upon retirement.

Do you know other tips when it comes to superannuation in Australia? Share your insights in the comments section.

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