Are managed super funds enough?
Tuesday July 29, 2008
Managed super funds may not be the only thing you need for a comfortable retirement. Far too many people take a relaxed attitude to their retirement plans. While the compulsory contributions to managed super funds are certainly a good start, some people seem to be under the impression that this will be enough for them to retire on. Those nearer to the end of their careers will have likely learnt by now that that is not the case, but those in the early stages or middle of their careers will often not pay enough attention to their managed super funds. This is unfortunate, as the earlier one takes an interest in how a super fund works, the greater the effect that any action taken can have.
When a super fund has just been established, there isn't much choice in what can be done. One can choose which types of super funds they may be interested in and may add extra funds, but there are limited options. Starting self managed super funds before there is a large amount of money in your superannuation can be risky, as the cost of setting up self managed super funds can be prohibitive. Tools like ESUPERFUND can be helpful, but self managed super funds are certainly not for everyone.
Finding a super fund that has a good balance of fees compared to returns is how many people improve their retirement prospects. Industry super funds can be good for this, but choosing a super fund is based on many different elements, so industry super funds will not be suitable to all. It is important that other investments are taken into account when planning how much you need in managed super funds, as well. If you do not own a house, then you will need to take rent costs into account, just as you will need to consider car loan payments if you think you'll need a new car at some point. Managed super funds are just one part of your retirement funds, so be sure you know where you stand overall.
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