Most Australian workers know that some of their money goes into superannuation every year but are unaware of exactly what it is being invested in. Yet their super will play a large role in deciding what kind of life they can live once they reach retirement age, so it is worth getting to know the details. For the vast majority of people, the sooner you start planning for retirement, the more comfortable you will be.
Like many people, you might be concerned that you lack the financial know-how to make smart investment decisions. Alternatively, you might not have the time to research the options as thoroughly as you would like. Fortunately, there are qualified people at hand to help you plan your financial future – licensed financial advisors. This short guide explains what they can do to help your super investments.
How financial advisors can help with your super
Most people just know that their super is somewhere that part of their paycheck automatically goes each month so that they will have some money when they retire. But there is more to them than that and you can adapt them to better fit your circumstances.
Here are some of the ways a financial advisor can help you do that.
Choosing the right super
Different supers hold different combinations of investments. A Hub24 super will be different from other providers, for example, although there are regulations they must comply with so as not to become too risky.
Not only do the investments differ, but so do the fees and the level of risk. These can make a big difference to the income it pays you in retirement. A financial advisor can help you make sense of these. They can model how different supers might perform in the future and the impact that fees will have, providing you with precise estimates of what will be available to you in retirement.
They will then help you select the option that best fits your appetite for risk and your target retirement income. Even if you opt for a self-managed super, professional financial advice can be helpful when choosing your investments.
Choosing insurance
Life can deliver some nasty shocks, and many supers also provide insurance so that you and your family have some financial stability if they do.
The premiums for the insurance are taken from your super, so essentially they are another fee and this will have an effect on the return your investments make. A financial advisor can estimate the impact and see if the cover is cost-effective.
Optimising taxes
Taxes on super withdrawals and contributions are confusing, but they can make a big difference to your future income. A financial advisor can help you plan for this so that you do not end up paying more than you need to.
Conclusion
Professional advice can help get your super into shape so that it delivers on your retirement goals. The investment mix, fees, insurance, and taxes are all very important in the long run, but it is hard to put this into numbers by yourself. A licensed financial advisor can model these for you and use their experience to help you make the right choice for your situation.