WHAT IS SUPERANNUATION?
Superannuation is a government regulated investment strategy designed to provide for Australians financially upon their retirement. These are usually in the form of superannuation funds which are built up by a combination of compulsory and voluntary contributions from employers and individuals over their working lives and are preserved (locked away) until you reach preservation age at which time you can access the funds.
Your super arrangement is not set in stone, as you change you may need to try alter your investment strategy. So how do you find the super strategy that fits you? Generally, financial advice recommends you consider two factors – your individual risk profile and the length of time you’re investing. This is where a Financial Planner can help, a qualified professional with one goal in mind, helping you reach yours.
TYPES OF SUPERANNUATION FUNDS
Superannuation funds have various types, ranging from funds with one to four members for which the members manage the assets, to those with hundreds of thousands of members, with billions of dollars under management of the trustee.There are myriad choices of different fund managers and levels of advice to take if you decide to manage your own superannuation, but when it comes down to it, if you are one of those people who can choose where your superannuation money should be housed, there are two basic choices:
• SMSF or self-managed superannuation funds, and only a few retirees may benefit from the fund contributions. Often, only a maximum of four or five benefit from do-it-yourself funds.
• Employer stand-alone funds are types superannuation funds wherein company owners manage the fund on behalf of their employees. The conditions in employer stand-alone funds vary from one employer to another.
• Industry Super Funds, in industry funds, which are groups or associations of business owners who manage the funds.
• Public Sector Superannuation Funds, only government employees are covered by the contributions. It is also the government that runs this superannuation fund.
• Master Funds, these are types of superannuation funds that feature two variations – retail master trusts or wholesale master trusts. Retail master trusts may also be called wrap platforms. These platforms give access to a range of managed funds/equities (shares) and allow financial planners to advise on portfolio allocation.