What to look for in your super statement
We asked Queensland University of Technology professor and personal finance expert Noel Whittaker the most important things to look out for in your super statement and he replied, “The fees, the asset allocation, and whether a binding nomination needs to be in place.”
We’ll take you through these things now, and why it’s important to be mindful of them when you’re looking at your super statement. Being on top of these now can save you some fiscal pain later.
Fees
A superannuation statement is required to publish information on the fees you paid to the fund during the reporting period. Over the year a superannuation fund will incur a range of fees that include member fees, management or investment fees, contribution fees, adviser service fees and insurance premiums that are brought about by the running of the fund and the management of your money. It’s important to be wary of the amount of money you are dipping into your super fund.
Asset allocation
Most superannuation statements will also often provide information regarding allocation, which is pretty much telling you where your money is being put. Superannuation funds generally hedge your investment by spreading it out over international shares, fixed interest account, cash, property, infrastructure and other assets, but it’s important to know exactly where this money is going, particularly if you have aspirations to function as an ethical investor. By understanding the asset allocation of your super you know where the bottom line is and where the buck stops.
Whether binding nomination needs to be in place
Speaking very broadly, today in Australia the Legal System separates individual’s personal assets from their super. Upon someone’s death personal assets will be pooled in the Estate the Executor named in your Will distributes them. However, superannuation savings can be directed straight to a beneficiary and bypass the estate. It’s important to note that a binding death benefit instructs superannuation funds where to make the final death benefit payment after you die. In many cases this is only valid a few years at a time, so if you feel as though you would like your superannuation payment to go to someone in particular the onus is on you to change it and keep it up to date.
Conclusion
Superannuation can be a difficult thing to get your head around. But in the end of the day it isn’t rocket science and as long as you’re cautious and conscientious of your investment decisions then you should be able to scrape through unscathed. That being said, the onus is on you to inform yourself and make sure you’re making the right super decision for yourself and your family.
Noel Whittaker is a best-selling author, finance and investment expert, radio broadcaster, newspaper columnist and speaker. One of the world’s foremost authorities on personal finance, Noel recently released The Retirement Living Handbook. Co-authored with Rachel Lane, this handbook provides expert insight into retirement communities and is available here.
Related links:
The weakening Aussie dollar could be harming your super
3 great ways to make money after you retire
How to calculate the bank balance you’ll need to retire