Superannuation: 3 Things you need to consider

[dyna]

, I doubt many 20 year old's care about that issue

With 10.5% of their own money, currently going into a superannuation fund every 1/4 , eventually all of them will slowly have to begin to query things like : Choosing the right fund in the first instance ( The single most critical decision any of them will ever make re : saving for retirement )
Fees and charges in comparison to Industry Funds or Not For Profits funds .
Performance over the medium to long term .
The pros and cons of paying for expensive Insurance through a Superannuation Fund .
It is very basic , elementary financial information. Extremely simple to understand. If young people do not take an interest in this rather dull stuff, their financial futures will be very bleak , indeed.

 

[InsvestoBoy]

1. A large chunk of contributions was going towards insurances that wasn’t necessary, by my calculations the insurance had lowered the possible balance by over $200,000.

That is wild.

Can you share your calculation?

I just checked my super insurance, death+TPD is $530/y which compounded yearly for 30 years at 10% would be something like $80k.

 

[Value Collector]

That is wild.

Can you share your calculation?

I just checked my super insurance, death+TPD is $530/y which compounded yearly for 30 years at 10% would be something like $80k.

The one where the possible difference was $200k had life insurance and income protection insurance I think something about permanent disability, from memory I think they were paying a little over $200 per month, I think I used 25 years for the compound interest calculation.

Also keep in mind that $530 / year you say you pay, can add up to over $320,000 over the possible 50 years time frame is some had super from when they were 18 to 68.
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I believe if you want insurance, you should not be using your super to pay for it, shop around and buy the insurance out of your pay check, then you will know if you really want it, rather than just ticking a box.

Even if super is the cheapest insurance, you should be making extra contributions to the super to cover the cost of the insurance. Other wise “40 year old you” is dipping into “60 year old you’d” money to pay for an insurance that 40 year old you wants.

 

[orr]

This tangental and only anecdotal to the themes above;
Ten odd years ago I had cause to make a cliam on 'income loss' due to motor vehical accident injury under a compulsary insurance aspect of my (at the time) Industry fund, a component I kept at the bear minimum... Lets just say that it was a very unsatisfactory expirence.
I'd like to know of anyone who has had a 'satisfactory one'.
The onerousness of the legalise is developed to make every aspect more time than it's worth.
If there's a Union worth starting? It would be Insurance paying SuperFund members. That might go a ways toward cleaning up the act.



The scope for malfeasance in this area of the super industry was made clear by how little attention it was given in the Banking Royal Commission. From memory it had a hour or two on one afternoon.

 

[Belli]

In regard to @orr's post, I assume those in industry funds in particular are aware of the changes to income protection which occurred a couple of years ago.

Major changes to income protection cover from 1 October 2021

In January 2020 we wrote about the significant changes coming to new income protection insurance policies in Australia, with some of these changes due to take effect from 1 October this year, and at least one measure delayed for 12 months. In this article is a summary of what is changing and why...

www.bdo.com.au

 

[divs4ever]

Hidden fees are a super problem​

Hidden fees are a super problem

Most Australians don’t realise they are being charged up to six different types of fees on their superannuation. These fees can be opaque and hard to compare across different funds and investment options.

www.firstlinks.com.au

yep .. that is why i invested in wealth managers early in my investing adventure ( rather than their products/services )

 

[Dona Ferentes]

Get familiar with super apps or you could be losing money, says Australian Retirement Trust

About 77 per cent of the nation does not check their super app regularly while 28 per cent are yet to download it and that neglect is expensive, says Australian Retirement Trust.

About 77 per cent of the nation does not check a super app regularly while 28 per cent are yet to download it, according to a YouGov survey. The Australian Retirement Trust believes the failure to embrace super apps is leading to a lack of financial literacy.

Those figures break down even further across genders; with one third of women are yet to download their super app compared with 24 per cent of men, while 17 per cent of women use their super app once a month compared with 27 per cent of men.

ART’s Anne Fuchs told The Australian that the superannuation fund was “desperate” to get more women using the app regularly and taking better care of what is for most people their largest financial asset.
“For some reason they are really not keeping up with their male counterparts and we are just desperate to get women to awaken to their own financial assets." “It will probably be their largest financial asset in their life and they’re going to need to depend on it so that they don’t have to depend on anyone.”

Ms Fuchs said the breakdown was disheartening, particularly as older women in Australia were the fastest group becoming homeless. She encouraged young women seeking financial independence to be more active with their super.

Less than 2 per cent of ART’s members under the age of 40 were making voluntary contributions to their super compared with 20 per cent of members over the age of 40

 

[Value Hunter]

Less than 2 per cent of ART’s members under the age of 40 were making voluntary contributions to their super compared with 20 per cent of members over the age of 40

I am under 40 and refuse to make any voluntary contributions to Super as I am all too aware of the sovereign risk. The unsustainable government debt in Australia will eventually have to be paid for somehow......

 

[Bellcose]

About 77 per cent of the nation does not check a super app regularly while 28 per cent are yet to download it, according to a YouGov survey. The Australian Retirement Trust believes the failure to embrace super apps is leading to a lack of financial literacy.

Hmm, so despite having other sources to check, such as the particular superannuation fund website, 77% of the nation couldn't give a toss and the other 28% cannot function without an app on a smartphone. Or is it 98% couldn't either give a toss and still cannot function even with an app on the phone?

"Less than 2 per cent of ART’s members under the age of 40 were making voluntary contributions to their super compared with 20 per cent of members over the age of 40"

Has it occurred to these mouthpieces that maybe, maybe, the 2% are up against it and don't have the readies to make voluntary contributions even if they wanted to?

 

[divs4ever]

I am under 40 and refuse to make any voluntary contributions to Super as I am all too aware of the sovereign risk. The unsustainable government debt in Australia will eventually have to be paid for somehow......

that is a mature attitude

we seem to have a shrinking/aging population ( even with controlled immigration )

the likelihood some jobs will disappear ( due to automation/AI ) and others will no longer be 'full-time ' and then you have political pressure on how formal Super funds invest the client's capital

... and i forgot ... the tendency for governments/regulators to change/meddle with the Super funds activities ( say at what age you can draw-down on your contributions )

nice to see SOME of the population still has some math. skills

 

[divs4ever]

Has it occurred to these mouthpieces that maybe, maybe, the 2% are up against it and don't have the readies to make voluntary contributions even if they wanted to?

yes there is that issue as well , many have acquired hefty education debt and are trying survive the actual inflation impacts

BTW it might be MORE than 2% that are struggling