Watching your super could save you $51,000
$52.5 billion in the next decade. The report revealed that for a single person on an annual income of $100,000, they would end up with $51,000 less over a working lifetime if they did not have their money in a fund’s default MySuper option.
The difference in returns is based on a 25-year-old who retires at age 67.
The member could end up with $503,000 at retirement versus $452,000 if they opted for a different investment option outside of MySuper.
MySuper is a low-cost and simple option that employees are automatically defaulted into unless they choose otherwise. Other alternatives include opting for money to be invested in cash or highgrowth options. High growth is when money is invested more heavily in riskier assets such as equities.
AIST’s chief executive officer Eva Scheerlinck has urged super fund members to check the fees they are paying on their accounts.
“We want people to realise the money in super is their money,” she said. “They should take half an hour every couple of years to work out if it’s right for them.”
She suggests checking that member admin fees are no more than $2 per week and beware of asset-based fees – some funds do not charge these.
On top of this, members should also check insurance cover costs. Bank-owned super funds have copped a battering in the financial services Royal Commission for unfairly gouging members excessive fees and delivering poor returns.
AustralianSuper group executive Paul Schroder said that MySuper provided “people with a simple, cost-effective option for their retirement savings”. MONEYSAVER HQ P31