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How to compare super funds

No matter how close or far away it is, when it comes to super, we’re all working towards making sure we’ll have a sizeable nest egg when it comes time to leave the workforce. The superannuation market however, is flooded with options, so when it comes time to decide which fund will work best for you, it’s understandable that you might feel a little overwhelmed. While the best choice will be different for everyone, there are certain things you can look out for to help you make a decision.

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In general, superannuation will play a huge role in determining what kind of retirement you’ll lead. The government age pension is a safety net that you may be able to access, but most Australians will be hoping to also rely on some super savings to help them live their retirement dreams. That’s why it’s so important to choose the right super fund for you.

The actual process of choosing a super fund is fairly easy – you simply fill out the Australian Taxation Office’s Superannuation standard choice form when you start a new job. Deciding which super fund you want to join is the tricky part.

Whether you’ve just switched jobs and are uncertain of whether you should stay with your existing super fund, or if you simply want to make sure you’re with the fund that’s going to work the best for you and your retirement plans, comparing super funds can be a confusing, overwhelming process.

Let’s take a look at some of the factors you should take into account when comparing super funds.

Key takeaways:

  • When comparing super funds, long-term investment performance after all fees and costs is a key factor to consider.
  • It’s also important to consider administration and investment fees and costs, insurance cover options, and the member services funds offer.
  • Comparison websites can help you compare super funds based on performance, fees and costs, member services and other factors.

What to look out for in a super fund

When comparing super funds, there are certain things you should weigh up to make sure you choose the fund that is going to perform the best for you, including:

What is their long-term investment performance?

Because super is a long-term investment, it’s important to look for good performance over a longer-term timeframe – at least five to 10-years, rather than short-term, annual returns. Some super funds will focus on exceptional performance for last year, but you want to be with a fund that will perform best for you in the long run.

Keep in mind that past performance isn’t necessarily indicative of future performance, so it shouldn’t be the only thing you look at.

Does the fund have competitive fees and costs?

Another important factor to consider is the administration and investment fees and costs a super fund charges members. While a small percentage difference might not seem like much in the short term, when accounted for over the period of your working life, it could result in losing out on thousands of dollars.

What insurance options does the fund offer?

Having insurance cover within your super could give you peace of mind should you pass away or can’t work for a period. But not all funds offer the same types of cover. The types of insurance that may be available from your super fund include:

  • Life insurance, which provides a lump-sum payment to your nominated beneficiaries after your death.
  • Total and Permanent Disability (TPD), which pays you a lump sum in the event you become totally and permanently disabled. The definition of total and permanent disability varies between funds, but essentially it means that your disability will prevent you from working again.
  • Income Protection insurance, which insures you for a set level of your income for a certain period of time should you be unable to work due to illness or injury.

What other services does the fund provide to members?

What member services does the fund offer? Can you access your account online, including via a mobile app? Does the fund offer financial advice to members? Does this advice come at a cost or is it included as part of fund membership? Does the fund have information and education or tools and calculators easily accessible and usable to help you understand and make the most of your super?

What’s the deal with comparison websites?

There are plenty of super comparison websites that can help take some of the guess work out of choosing the fund that’s right for you. It’s good to be mindful that some of these comparison sites may take payment from certain funds, which could influence the coverage they receive on the site.

Some comparison websites on the market include:

  • Canstar
  • Finder
  • SuperGuide
  • RateCity

To find out how Australian Retirement Trust compares to the average fund, compare us and see how much better off you would have been as an Australian Retirement Trust member.

Before joining Australian Retirement Trust, consider the potential loss of insurance and other benefits that you may have in your other funds. The information contained on this website is general information only and does not take into account your individual objectives, financial circumstances or needs. You should consider your own objectives, financial circumstances and needs, before making a decision about the financial product. Also, think about where your future employer contributions will be paid. You should consider the Product Disclosure Statement and Target Market Determination before deciding whether to acquire, or continue to hold the product. For more information or financial advice from Australian Retirement Trust, call us on 13 11 84.

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