Rising Tide Blog

KARL: Now, choosing the right superannuation fund can be time-consuming, and for most of us, pretty confusing I reckon.

LISA: Yeah, so to tell us how to pick the right fund that’s best for you, we’re joined now by finance expert Chris Browne. Chris, good morning to you.

CHRIS: Good morning Lisa.

LISA: So, let’s start with people in their twenties, starting out in their careers. What should they know about choosing super?

CHRIS: Yeah, look, when you’re just starting out, a good place to start is just looking at performance, but don’t get trapped into looking at single year performance figures. What you need to do is you need to look at long-term performance, because any super fund can shoot the lights out in a single year. Also, need to look at things like fees, because you’re at the start of your career, you don’t have a lot of dough in your super fund, so you certainly don’t want it eroded by fees. And then finally, don’t put all your eggs in one basket. You’ve heard it from mum and dad; make sure you spread it across different asset classes.

KARL: Okay, people in their 30s and 40s.

CHRIS: People in their 30s and 40s have probably got a few tin lids. Now the relevance to super with that, is you need to look beyond performance and fees and think about things like insurance. So, if you drop off the perch, you’ve got some life insurance to leave to your surviving spouse. This is also the time where you need to sit down with a financial planner; it’s confusing, it’s time-consuming, so you need someone in your corner to actually guide you through some of these decisions that you need to make in relation to your investment choices.

LISA: Alright, moving onto people in their 50s and beyond, obviously they’re at that point where they’re going to be cashing in their super. If they want to retire in style, what do they need to know?

CHRIS: People nearing retirement might actually find that they’ve done the hard yards early and they’ve actually accumulated a heap of money in their super, and they don’t need to take the same sort of risk that they were taking about 10 or 20 years ago. So, you need to pick a super fund that can let you take some risk off the table so to speak. So, cash and bonds need to be a part of it.

The people playing catch up, some people might actually consider having a self-managed super fund set up, but need to be really cautious. You don’t wanna do this unless you’ve got in excess of about $300,000, because it becomes cost ineffective. And I also strongly recommend that you find a ripping accountant; dot your i’s, cross your t’s, because the regulation is really, really strict when it comes to self-managed.

KARL: Great advice Chris Browne, thank you mate. Great to see you again.

CHRIS: Good on you. See you, Karl. See you, Lise.