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Welcome back everyone. In the sixth and final part of my blog series, I want to discuss something that affects all of our financial journeys: Superannuation. Perhaps you’re concerned about your retirement savings? Or maybe uncertain about how to make the most .....
If you work for a business, chances are that you’re eligible for the corporate super fund. With so many options available for investing for your retirement, it can be confusing to know whether or not you should go ahead and use the corporate super fund available to you.
Retirement planning is certainly not a one-size-fits-all endeavour, and therefore, deciding whether or not to invest in a particular super fund requires some analysis and research. You can start your research by learning about the pros and cons of corporate super funds. We’ll get you started.
Because corporate super funds generally have a number of members, fund managers have the leverage they need to negotiate special fee arrangements. Even marginally lower fees can make a big difference in the long run. When your fees are lower, more of your money is actually being invested, and over the years, these small gains can turn into big results.
Again, because of the large numbers of investors in a single pool, people who invest in corporate super funds are often eligible for additional benefits such as life insurance and disability policies. Some corporate super funds even include salary continuance benefits, which are provided by related life insurance companies.
In most cases, people are only eligible to participate in corporate super funds while they are employed by the corporation. If you’re a long-time employee of a corporation, this works out well, but if you change jobs, you will lose your eligibility to participate. Of course, you would have the option to consolidate old corporate super funds into a single individual super fund.
Any time you work with a product that is run by a large business, you’re likely to run into the problems associated with bureaucracy. There may be more paperwork, more hoops to jump through, and more time involved than there would be with an individual super fund.
Since the parameters of the fund are set up by someone from your organisation, you may find that your investment choices are limited in corporate super funds. If you’re particular about your investments, or if you have a specialised retirement planning strategy in mind, corporate super funds may be too restrictive.
To learn more about corporate super funds, or to learn about any other retirement planning issues, contact us at Altus Financial.
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