Industry Super Funds Are Sometimes A Great Option For Savers But They Can Become Far More Expensive For Retirees!

Many investors may be unaware that some Industry Superannuation funds have a lower fee structure for their super accounts and a higher fee structure for their retirement income (pension) accounts.

To give this issue some perspective, we have looked at the fee structure for retirement income accounts offered by some of Australia’s leading Industry superannuation funds#: Australian Super, Care Super, Cbus, Hesta, Host Plus, MTAA and Unisuper.

For an example portfolio balance of $50,000 the total annual fees* of the Industry Funds reviewed, for a “Balanced” retirement income account they ranged from $417 p.a. – $895 p.a..

For an portfolio balance of $250,000 the total annual fees* of the Industry Funds reviewed, for a “Balanced” retirement income account they ranged from $1,679 p.a. – $2,915 p.a..

Our preferred “Balanced” account alternative is a non Industry Fund option that has the following fee structure:

For an portfolio balance of $50,000 the total annual fees* for our preferred non Industry fund “Balanced” retirement income account would be $335 p.a.

For an portfolio balance of $250,000 the total annual fees* for our preferred non Industry fund “Balanced” retirement income account would be $1,662 p.a.**

Hot Tip:  Always read and understand the fine print before investing and do not assume that all Industry Superannuation Funds are similar and that they are always your best option when you retire.

Disclaimer:

#Not all of the Industry Superannuation Funds reviewed have different fee structures for their super and retirement income accounts so please review all of the relevant Product Disclosure Statements before forming a conclusion.

*Fees quoted are estimates derived from the current Product Disclosure Statement information for the offered “Balanced” retirement income accounts.  Fee estimates do not include any financial advice fees and transfer fees that would be payable.  Fees and charges may change in the future.

**A cheaper and more basic option is also currently available.

www.financialadviceshop.com.au

#financialplanning

Advertisements

Don’t Be An April Fool: There’s Only Three Months Until The End Of Financial Year And You Have Plenty Of Things To Think About!

So what are some of the things you might need to think about before the end of the financial year?

April is a great month to review your salary sacrifice contributions and make sure you are on track to maximise the opportunity in the current financial year.  If you have not made any salary sacrifice contributions in the current financial year, you still have time to make a solid start.  If you have been salary sacrificing and could do more, now might be a good time to think about ramping it up.

When it comes to tax effective superannuation contributions, there are a number of very simple strategies involving a drawdown from other assets to help you tax effectively contribute more than you might otherwise be considering.

April is also a great month to be thinking about splitting superannuation with your partner.  Reasons to split super can vary but common reasons include equalising super balances or an age difference that means one of you is much closer to retirement.  You have until the end of June this year to split 85% of last financial year’s concessional superannuation contributions.

There are also personal contributions for the Government co-contribution and spouse contributions for the spouse rebate that might be worthy of further consideration depending on your circumstances and eligibility.

If you have sold an investment property or another asset and have triggered a capital gain, don’t forget you may be able to use superannuation contributions to assist with managing any capitals gains tax liability.  You still have plenty of time to seek advice and think, plan and act.

There might also be things to prepay or purchase to bring forward a tax deduction in the current financial year.  Make sure you start the conversation with your tax adviser before it is too late.

If you are self employed, don’t leave it to the last minute to plan and make your superannuation contributions.  If you are planning a superannuation contribution, make sure it is received in your superannuation account well before the end of June.  I’ve seen it far too often where a contribution is delayed by an electronic transfer and the contribution ends up counting towards next year’s contribution limit and that can really stuff things up.

HOT TIP:  Don’t turn into an April fool because you are time poor or lazy.  Take a moment to get some sound advice and plan your course of action for the three remaining months in the current financial year!

www.financialadviceshop.com.au

#financialadvice #eofy