More than just fees: the 5 things you should consider about your super this year
When it comes to assessing your super fund, fees tend to attract the most attention. But there are some other considerations to weigh up, too.
Superannuation is one of those things that's very easy to put into set and forget mode. But checking in on your super – and making adjustments if necessary – is a crucial part of good financial hygiene.
At least once a year, you should check in with your super fund to see if you're still satisfied with how it's setting you up for retirement.
But you need to look at more than just the fees you're paying. In this article, we'll tackle some of the other important considerations.
1. Investment flexibility
Superannuation shouldn't be a one-size-fits-all prospect.
Rather, the way your super is invested should be determined by a range of factors, including your risk tolerance, retirement goals and your life stage.
Having a super fund that allows you to tailor your investments can allow for greater opportunities – and potentially greater returns.
One example of a super fund that offers members investment flexibility is CareSuper.
Currently, CareSuper members can access 13 different investment options.
This spans 6 pre-mixed investment portfolios and 6 single-asset class options, as well as a Direct Investment option that lets you get hands-on with your investments.
These investment options span a range of growth assets (e.g. shares), defensive assets (e.g. cash, fixed interest income) and a Sustainable Balanced option.
You can tailor your investments to match your own comfort level and retirement goals easily through your online account. Plus, you can also access financial advice for free to help you decide which option or mix of options is right for you.
2. The type of fund
Super funds can be broadly split into two categories: for-profit and not-for-profit.
For-profit funds are generally owned by financial institutions, such as a bank or insurer. They also tend to have outside stakeholders, like investors and shareholders.
Not-for-profit funds are member-owned. Profits are channelled back to members, rather than outside stakeholders.
Both have their advantages – but as a rule of thumb, not-for-profit funds tend to charge lower fees.
Finder's current breakdown of the top 10 balanced funds over the last 10 years also indicates that all of the best-performing funds are not-for-profit funds.
An example of a not-for-profit fund is CareSuper, which charges low fees and takes a profit-to-members approach.
3. Prior performance and public reputation
Ideally, you want your super fund to have a history of impressive performance and a great public reputation.
So, where do you start?
Well, when it comes to performance, don't just look at the last year or two. You should be looking back 5, 10 or even 20 years where possible.
Although past performance doesn't guarantee future success, it can still act as a gauge of how a super fund is likely to manage your retirement savings.
Reports like the Annual Superannuation Performance Test from APRA can also be useful.
You'll be able to see whether your current fund is performing to an acceptable standard.
But what about public reputation?
Looking at consumer reviews can also provide you with an overview of how other customers find the service provided by the fund, too.
It also never hurts to look at awards. As one example, CareSuper won the Finder Industry Super Fund Customer Satisfaction Award in 2022.
4. Access to financial planning services and advice
The decisions you make about your super can have a significant impact on the savings you have available in retirement.
So it can be helpful to seek expert financial advice.
It's worth checking whether your super fund provides access to professional financial advisors. They can help you make informed decisions about your super.
CareSuper is one fund that provides this service for customers.*
Being able to access professional advice can help you ensure you're on track to realise your retirement goals.
5. Insurance options
Sourcing insurance through a super fund can offer a number of benefits in comparison to a traditional insurer.
Sometimes you can source better coverage, lower premiums or simply get access to products you might not otherwise have been able to.
This can be particularly useful if you have a pre-existing health condition that might preclude getting cover elsewhere.
It's worth having a think about how much money you might need if you were unable to work due to an accident or illness, and then adjusting your insurance accordingly.
For example, are you still paying off your mortgage? Do you still have dependents at home or elsewhere?
Most super funds offer life insurance, TPD insurance and income protection insurance.
Certain funds – like CareSuper – also offer discounted health insurance through their partners as an additional member benefit.