Criteria To Compare Superannuation Funds

There are many things to consider when choosing a superannuation fund including investment options, investment performance, fees and costs, insurance cover and extra services such as financial advice.

Every super fund has a product disclosure statement (PDS) detailing:

• fees and costs
• death and disability benefits and insurance premiums
• investment strategies you may be able to choose
• objectives of each investment strategy, its risks and likely returns
• fund features and services, including complaint handling procedures

Reading through each fund’s PDS should help you compare fees and costs, the level and cost of insurance cover and investment options. When it comes to fund performance, look at long-term performance of at least five years, and look for a reasonable performance.

Remember past performance is no is no guarantee of future returns. Today’s top-performing funds tend to fall back to the average over time. On the other hand if a fund consistently underperforms that’s obviously not a good sign either.

Most importantly you need to choose a superannuation fund that suits your goals, values and personal situation. This is where an adviser can help. They can work with your to find a fund with the right level of choice and flexibility, the right mix of investments to help you meet your goals and  good insurance cover to protect you and your family.

Government Co-contribution Scheme

The superannuation co-contribution is a government initiative to help eligible individuals boost their super savings for the future. If you are a low or middle-income earner, you may be eligible for the super co-contribution, whereby the Government matches up to $1,000 of your personal (after-tax) super contributions.

You don't need to apply. If you're eligible, all you need to do is make a personal contribution up to $1,000 to your super fund or retirement savings account and lodge an income tax return. The maximum super co-contribution payable depends on the income year in which you made your eligible personal super contributions and whether your total income falls between the super co-contribution income thresholds for that year. Talk to an adviser to see if you are eligible and visit www.ato.gov.au for more details.

Superannuation the best way to save for retirement

Superannuation is one of the best ways to save for retirement, with the Government offering many tax concessions to encourage you to do so. There are many strategies to consider such as salary sacrificing, Government co-contribution, spouse contributions, transition to retirement income streams tax-deductible contributions for the self-employed and many more. Whether you are eligible for these strategies will depend on your personal circumstances. But one thing is for sure, superannuation is one of the most tax-effective ways to save for retirement so talk to a financial adviser to start taking advantage today.

Superannuation tax concessions

In order to encourage people to save for retirement, the Government has provided many tax concessions to superannuation. To start with, pre-tax contributions to super are taxed at the concessional rate of 15%, rather than your marginal tax rate, which could be as high as 46.5% (including Medicare Levy). Additionally any income earned on your investment is also taxed at just 15% rather than your marginal tax rate, allowing you to boost super tax-effectively. Better yet, once you reach 60, so long as you’re retired you can withdraw this money from super tax-free as either a lump sum or pension.

There are also many other tax concession available, depending on your unique circumstances so talk to a financial adviser to make sure you are taking advantage of all your opportunities.