Don't be super silly!
DON’T BE SUPER SILLY?
Perhaps this is you… super is boring, who cares, it's tomorrow’s problem, I don’t really understand it anyway…
Here’s us… you’re being super silly! If superannuation were a country, many of us would try moving there simply due to the generous tax savings on offer. Tax savings now, and tax savings later too!
Cartoonists like 'NIC' are great at putting these things into a picture... which tells a thousand words...
Being smart with your superannuation is almost certainly the best way to ensure you have an adequate wealth nest egg for life beyond 60. If you need wealth, and income from that wealth after the age of 60, then best you ensure you’re not being silly with your super.
By the way, contrary to some vocal opinions, super is not a scam and yes, it is 100% your money! That means it’s also your responsibility to pay attention and take action.
Here’s how many hard-working Australians are being silly…
#1. Most hard-working Australians do NOTHING to sort out their super. Its estimated the average 25-year old will lose more than $250,000 in fees, which equates to over 20% of your nest egg. This issue can easily be rectified by using a low cost super fund and low cost investments.
#2. By doing NOTHING, your super benefits are very likely invested into what is referred to as the “default fund” by your employer. This means that approximately 15% to 30% of your money will be invested in defensive type assets like cash. That’s ok, we all know that cash is seen as a safe investment, but what about the risk of $10 today being worth $10 in 30 years’ time? How much will fees, taxes and inflation eat away at your cash? Your cash cannot grow, its stuck as it is… this could cost you more financially than the potential high super and investment fees we mention above.
Hopefully you can see that doing NOTHING with your super is silly!
Your super will be eaten away by fees, while the defensive, cash type assets cannot grow for your future self. We are not gamblers, but if we were, we certainly wouldn’t be betting on the age pension being around for the long term. This means we all need to anticipate funding our own retirements and there is no better wealth channel than superannuation to do this .
We cannot control what happens tomorrow on the stock market, however we can control how much we pay in fees, and we can make sure our money is invested to grow for the long term.
So please don’t be silly with your super! Sorting out your super is one of the smartest financial actions you can take (and one of the easiest!!). Your future self will thank you for it!
Cheers,
Dan and Dave
