Super slackers risk loss
AUSTRALIANS may be dudding themselves out of more than $50,000 in retirement savings by ignoring their superannuation, a new study reveals.
The research, by Rice Warner and the Australian Institute of Superannuation Trustees, found workers could be short-changing themselves $52.5 billion in the next decade.
It showed 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 25year-old who retires at age 67.
The member could end up with $503,000 at retirement versus $452,000 if they opted for investment outside of MySuper.
MySuper is a low-cost option which applies automatically to employees unless they choose otherwise. Alternatives include opting for money to be invested in high-growth options such as equities.
AIST’s chief executive officer Eva Scheerlinck has also urged super fund members to check the fees they pay on their account.
“People should take half an hour every couple of years to work out if the fund is right for them,” she said.
She suggests checking administration fees are no more than $2 a week and to be aware of asset-based fees because some funds do not charge these.
Bank-owned super funds have copped a battering in the financial services royal commission for unfairly gouging members, charging excessive fees and poor returns.
AustralianSuper group executive Paul Schroder said: “not all MySuper options are the same and a poor choice could cost you dearly in the long run.”