Three things to consider when switching your super

Understanding how your super works and making sure you are getting the most out of your fund is essential to achieving the retirement lifestyle you envision.

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.

Three things to consider when switching your super

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.

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 government’s MoneySmart website 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 per cent 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. Call us on 03 9553 0271 to discuss further. 

Source: Vanguard

Reproduced with permission of Vanguard Investments Australia Ltd

Vanguard Investments Australia Ltd (ABN 72 072 881 086 / AFS Licence 227263) is the product issuer. We have not taken yours and your clients’ circumstances into account when preparing this material so it may not be applicable to the particular situation you are considering. You should consider your circumstances and our Product Disclosure Statement (PDS) or Prospectus before making any investment decision. You can access our PDS or Prospectus online or by calling us. This material was prepared in good faith and we accept no liability for any errors or omissions. Past performance is not an indication of future performance.

© 2022 Vanguard Investments Australia Ltd. All rights reserved.

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CFP® Dip FP
Authorised Representative 298494
Interprac Financial Planning Pty Ltd 

Darryl Jopling

Senior Adviser

I have worked in the financial services industry since 1982 and as a Financial Adviser since 1999.

I have worked for large Financial Planning businesses, Membership based organisations and looked after the financial planning needs of clients within an Accounting Practice before starting my own business.

I am married, have 4 older children and a grandson and I am keen golfer with mixed results like many .

I have been through many of the strategies I talk with clients about myself and with my family.

I have been through the journey of seeing my parents move into Aged care and negotiated the difficulties and pitfalls of understanding the system for them and this gives me an excellent insight into what is required to assist families at this difficult time.

In a previous roll I used to run retirement seminars looking at Centrelink and Retirement Incomes and how to make these work for you. I have helped many of my clients with Aged Care advice when their parents needed to move into Nursing Homes. For many clients I assist them with superannuation, building wealth and protecting their loved ones with insurance.

I am supported by his, Licensee, Interprac Financial Planning’s in-house resources and ongoing technical, systems and training.

I am committed to understanding your needs and identifying strategies and products to help you achieve your goals.

My guiding principle as an Adviser is to design plans which help to provide my clients with clarity of purpose and the opportunity to build a solid financial foundation.
I will take the time to listen, explain things clearly and keep you informed throughout the advice process.

My experience is complemented by professional qualifications including:

  • Certified Financial PlannerTM Professional
  • Diploma of Financial Planning

At Choice Financial Advice we work with you along the way on life’s journey.

Whether you are getting married, starting a family, embarking on the trip of a lifetime, planning to enjoy your years after work or assisting elderly parents with Aged Care and Nursing Home placements, we can help.