Choosing your employer’s default super fund may appear to be the easy option, but if you take the time to shop around you could reap the rewards in retirement.
Nominating a super fund for your employer to pay contributions into is, for most people, essential to building up funds for retirement. Most Australians are able to choose their super fund yet, perhaps unsurprisingly, the latest Your Super Future(2015) report commissioned by ING DIRECT and the Financial Services Council (FSC) reveals almost 7 in ten of us (68%) opt for contributions to be paid into our employer’s nominated super fund.
While this may be a convenient option, bear in mind that if you have multiple employers over time, you could accumulate multiple super funds, incurring multiple sets of fees and also multiple insurance premiums.
Impact of fees
Fees can have a huge impact on your super balance and therefore your retirement lifestyle. So it could be worthwhile comparing funds to see if you can find better value for money. According to Your Super Future:
• 20% of Australians pay more than $1000 a year a year in fees
• 38% think fees are too high
• 49% are unaware how much they are paying in super fees
The ASIC MoneySmart Super calculator could help you work out how much super you’ll retire with and the impact of fees on your final balance.
Checking your fees
Want to check the fees you’re paying? Take a look at your annual super statementfor a summary of the fees you are paying and make sure you are getting value for money. And if you’re not, consider switching to a low fee or no fee fund which could make it easier for you to build your balance over time.
If you’re not sure of the options available to you, consider speaking to an independent financial adviser.
How to switch?
Once you’ve found a super fund which offers value for money, switching funds is a fairly straightforward process: generally you just need to complete the request from your chosen super fund with no need to contact the super fund that holds your money.
Choosing a super fund rather than opting for your employer’s default fund may require a slightly larger time investment in the short term, but it could translate to a more rewarding financial investment – and retirement lifestyle – in the longer term.
The information is current as at publication. Any advice on this website does not take into account your objectives, financial situation or needs and you should consider whether it is appropriate for you. Deposit products, savings products, credit card and home loan products are issued by ING, a business name of ING Bank (Australia) Limited ABN 24 000 893 292, AFSL and Australian Credit Licence 229823. ING Living Super (which is part of the ING Superannuation Fund ABN 13 355 603 448) is issued by Diversa Trustees Limited ABN 49 006 421 638, AFSL 235153 RSE L0000635. The insurance cover offered by ING Living Super is provided by Metlife Insurance Limited ABN 75 004 274 882, AFSL 238096. ING Home and Contents Insurance is issued by Auto & General Insurance Company Limited (AGIC) ABN 42 111 586 353 AFSL Licence No 285571 as insurer. It is distributed by Auto & General Services Pty Ltd (AGS) ABN 61 003 617 909 AFSL 241411 and by ING as an Authorised Representative AR 1247634 of AGS. All applications for credit are subject to ING's credit approval criteria, and fees and charges apply. You should consider the relevant Product Disclosure Statement, Terms and Conditions, Fees and Limits Schedule, Financial Services Guide, Key Facts Sheet and Credit Guide available at ing.com.au when deciding whether to acquire, or to continue to hold, a product. Before interacting with us via our social media platforms, please take a minute to familiarise yourself with our Social Media User Terms https://www.ing.com.au/pdf/Social_Media_User_Terms.pdf.