The Superannuation industry currently manages around $1.8 trillion of Australian′s retirement savings and a recent report released by the Financial Services Council and ING Direct found that over 80% of workers acknowledge superannuation as essential in providing a comfortable retirement. Despite this, the report found that almost three quarters of Australians are in their employer′s default fund with only 27% likely to change their fund provider in the future.
These findings are consistent with many other indicators in the market that illustrate the disparity between importance and action when it comes to superannuation. We believe that the driver of this disparity is primarily influenced by the perceived complexity of Superannuation but like all complex problems, breaking them into component parts is often a good first step.
Super is a platform
It′s important to recognise that superannuation is a ′platform′; it′s not a single ′product′ that is purchased. This platform bundles your retirement savings, life insurances and other services all together to enable a comfortable retirement.
Thinking of it in this way allows us to pick apart the component parts and determine what option best suits your needs.
Two important questions
When considering your retirement nest egg the main questions are:
1) What growth/return am I getting on my funds?
2) How safe are my funds?
The importance of these two factors was evident in the experience of many investors prior to and during the GFC. In the few years prior to the GFC there were said to be just two types of people: those that were making money and those that weren′t investing.
Once the sub-prime market started to collapse returns and liquidity quite quickly dried up, the effect on many people′s retirement savings was sobering – to say the least. This market story is repeated throughout history but it doesn′t mean that investors need to be crystal ball-readers of the market to end up in a good position.
Our goal is to help breakdown the complexity of Superannuation so everyone can remain on a path to financial security and freedom. If you need more information please contact us today.