If you are serious about preparing for your retirement you will start with two questions
- Where do I put my money?
- Who is going to manage my money?
The place you put your retirement money is called super. There are hundreds of super funds available in Australia, they all give you a low tax environment to preserve your money, but when it comes to managing it they are not doing exactly same job. The best ones have achieved average almost 10% annual return in last 10 years, and the poor ones have performed far behind.
Super funds engage professional fund managers to manage their members’ money. These professionally trained people work full-time trying to get job done properly. If you don’t believe they can do a good job for you, no one can stop you from managing your retirement money by yourself, and that is called Self-managed Super Fund (SMSF). Even only having one to a few members in SMSF you still have to meet all the compliance requirement that all the other large funds do, which means the cost of running a SMSF is considerably high. For most people, you would be better off by finding a good large super fund with low cost and outstanding performance in the past, just set and forget. In this way, you outsource the job to professional people and share the costs with all the other members.
To get your money work hard for your retirement here is a to do checklist
- Choose a right super fund
- If you have more than one fund, roll over other funds into one super
- Choose the suitable investment option. The default one may not be the best for you.
- Review the insurance cover inside the super.
- Take advantage of all the benefits from government if you are eligible, such as co-contribution, spouse contribution, salary sacrifice and voluntary contribution for tax deduction.