So many clients I speak to either don’t know how much money they have in superannuation and/or they don’t know exactly where those funds are invested.
The reason for this is simple. People don’t feel they own their superannuation savings. Its something they are forced into and typically, beyond receiving a statement once a year in or around September, they don’t have any involvement in it.’
However, the money in superannuation is your money just like any money you might have sitting in a bank account and just as you wouldn’t let a lot of money sit in a cheque account not earning interest and not working for you, you should let your superannuation sit idle.
Most superannuation funds offer their clients one of four investment options when they join, such as conservative, moderate, growth and high growth. If you don’t remember picking one, then it is likely the fund chose a default option for you.
Once a choice is made, your money is then pooled with everyone else’s that has chosen that option and it is given to a fund manager to invest on your behalf. You may or may not be told how much this fund money is charging to provide this service but they will be charging for it on top of all the other fees your super fund is charging.
Then who knows what happens to it. It will be invested on your behalf but you will only ever have a general idea of where those funds will be invested. This is important as typically, if you hear of someone who has lost a lot of money in superannuation, it is because their funds were invested in a high growth option, which usually means high risk shares, and they have been caught by a down turn in the market.
At Osmonds Accountants and Financial Planners, we can direct your superannuation savings into a superannuation fund that will give you absolute control over every cent you have in superannuation. You can decide whether you want to invest your savings in term deposits, or managed funds or direct shares.
If you’re not sure where you would like these funds invested we can help you work through the issues and select the most appropriate investments for you.
As you move closer to retirement this choice will naturally change. When you are young and have another 40 years or so in the workforce, you want to put your money to work aggressively. If there is a down turn in the market, you will have a sufficient time to let the market recover and for you to recoup your savings.
As you move closer to retirement, typically you should be moving to more conservative investments such as managed funds and term deposits. Again we can help you make the appropriate investment choice.