Most working Australians have superannuation, but too many of them have fallen into the trap of believing in the myths.
Myth 1
Super is a poor investment, I could do better myself!
Then why don't you? Super is not an investment in itself, it is merely a very tax-friendly way of holding pretty much any investment you desire.
You are not limited to simple 'balanced' or 'growth' funds. Many of Australia's biggest and most respected financial institutions offer super products which give you total control over the investments selected and the freedom to chose when to buy and when to sell.
Want more exposure to emerging economies like China and India? Easy! Want to reduce your exposure to gold? Easy!
Myth 2
Don't I need an expensive self-managed super fund?
Not at all! For those with super balances in excess of $250k, an SMSF can be very cost effective, but for everyone else you can achieve a similar level of self-management through mainstream super products.
News Flash... There are now a number of very affordable options available for self managed super funds. An SMSF can now become an economical option for balances from as little as $50,000!
Myth 3
I can't change anything, my employer looks after it.
Aside from some very large companies which run their own funds, the vast majority of Australian companies simply run their corporate super through a financial institution or industry fund.
The good news is that you don't have to accept what your employer gives you.
Do you think that your super should be invested in the same way as your 18 year old co-worker who has just started their first job, or your 64 year old boss who is about to retire? No way!
For many Australians, your super will be your biggest asset by the time you retire. You wouldn't allow your employer to decide what type of house you should buy, or which bank you should use, so why let them control your super?
Taking control of your super may cost less than you think, and in some cases you may even save money by moving to a more appropriate fund.
Myth 4
You don't need a financial planner
The rules that govern superannuation are very complex and are continually evolving. Minor errors can lead to major consequences, so having a qualified professional onboard is a worthwhile investment.
Your financial planner also has access to a great deal of research that isn't always available to the general public. Even if you have strong ideas about how you want to invest your super, your planner can be there to help point you in the right direction.
The Risks
Unless you invest your super in 100% cash there is always the risk that you may suffer a loss. Strong diversification and active management of your portfolio can assist in mitigating this risk.
