Queenslanders could add thousands more to their retirement savings by putting super on their list of New Year’s resolutions, says Queensland’s largest superannuation fund.
QSuper CEO Michael Pennisi says budgeting and fitness often topped the list for resolutions but understanding how fees can impact your super can help ensure a rewarding retirement later in life.
“This helps with confidence and knowing that in retirement you could have the freedom to travel, as well as afford things like private health insurance, a car and other household items,” Mr Pennisi said.
“There are plenty of free online tools to help assess fees such as calculators which can compare different funds. To get a complete picture, it’s important to look beyond the figures to the overall value a fund provides.”
QSuper’s top tips for understanding fees:
- Find out the category your fund falls into and the types of fees they charge.
- Watch out for ‘hidden’ fees. Not all fees are stated up front, but things like transaction fees can really eat away at your balance
- Consider the total value you get from your fund, not just fees but service and investment performance
- Know that investment managers are paid a fee which includes a performance amount if they exceed their targets and get better returns for your super.
- Have a conversation with your super fund or a trusted financial adviser.
The latest industry figures from ASFA1 state that the average amount needed each year to support a comfortable retirement is $42,962 for singles or $58,915 for couples who own their own home.
In comparison, the full age pension is below the industry standard.
“Finding ways to maximise your super, like investigating your fee structure and considering the difference it could make, can help,” Mr Pennisi said.
QSuper recently reduced its administration fee and introduced a $1,000 annual fee cap to help its members add more to their super each year.
“We know that many Queensland residents have several decades of work ahead of them, so by taking an interest in the fees they pay now they have the potential to make a real difference to their future lifestyle,” Mr Pennisi said.
For example, an average 30 year old with an annual income of $50,000 could save an extra $30,000 towards their retirement at age 65 by reducing their management fees by one per cent2.
Mr Pennisi said understanding the fee structure of a super fund can be complex but plenty of help is available online or by calling your main Fund.
“For an overall view you should consider things like how the fund has performed, the investment options available, the services they offer and any benefits you get from being a member, in addition to the fees charged,” he said.
“We encourage Queensland residents to read their product disclosure statements carefully to understand the fees a fund charges, and to review their annual statements to see what they have personally paid.
“If there is anything you don’t understand, the New Year is a great time to have a conversation with your super fund or a trusted financial adviser,” Mr Pennisi said.
For more information about QSuper fees visit www.qsuper.qld.gov.au/fees
Maryanne Kepui/ QSuper / 3029 9355 / firstname.lastname@example.org
Emma Norris / PPR / 3309 4704 / email@example.com
QSuper is Queensland’s largest superannuation fund and manages in excess of $60 billion in funds for more than 540,000 members and was awarded SuperRatings Fund of the Year 2016 3.
1. Association of Superannuation Funds of Australia (ASFA) Retirement standard, September quarter 2015, assumptions and information: http://www.superannuation.asn.au/resources/retirement-standard
2.This example is provided for illustrative purposes only with the result calculated using MoneySmart calculator www.moneysmart.gov.au (accessed 21 December 2015). The calculation assumes employer contributions of 9.5 percent, a $1,000 per year insurance premium, a current super balance of $20,000, investment returns of 5.7 pa percent before taxes and fees and is shown in today’s dollars adjusted for inflation.
3. SuperRatings does not issue, sell, guarantee or underwrite this product. Go to www.superratings.com.au for details of its ratings criteria. Past performance is not a reliable indicator of future performance.