If you are like many Australians, your superannuation account is probably something you are aware of but not something you’ve had much interaction with. However, it is definitely something worth getting to grips with. It is one of the biggest factors in determining the lifestyle that you will enjoy when you retire, and you know what they say: The best time to start retirement planning is 20 years ago. The second best time is now.
Most people, however, find such planning difficult because they feel that they lack the financial expertise to make them. Or perhaps they simply don’t have time to research and understand all the different options. This is where seeing a financial advisor can come in handy. This article will help you understand how a financial advisor could benefit your super.
What can a financial advisor do for my super?
When it comes to your superannuation investments, which accrue throughout your working life and then provide an income when you retire, financial advisors can provide valuable advice to help you with the following decisions.
Choosing a super fund
While there are certain regulations to which super funds must adhere to make sure that they are not too risky, there are actually many different funds you can choose which all invest in slightly different things.
Picking the right one can have a significant effect on the income it provides you later, but doing so requires careful consideration of how the fund has performed in the past, how it invests, your own appetite for risk, and what fees it charges. Many also come with insurance cover, so there’s that to think about too.
This can be overwhelming, but a good financial advisor will have done all the research and will be able to point you towards the options that best suit your risk profile and goals.
Arranging insurance through your super
Part of being prepared for the future means recognising that the unexpected sometimes happens. Most super funds offer insurance to provide a financial safety net for you and your loved ones in case it does.
There are different types of cover you can choose from, and the premiums are paid from your super. This can affect how well your investments do over the long term. A financial advisor can help estimate how cost-effective the cover is.
Tax planning
Your super contributions and withdrawals are subject to a number of taxes that can be quite confusing to understand. The amount you pay depends on things like the total amount in your super, your age, and the way your contributions or withdrawals are made. Taxes can have a significant impact on how much you actually receive when you retire.
Financial advisors can help you design and implement tax-effective strategies which will help you maximize your returns.
Summary
While you are not obligated to seek professional financial advice in order to manage your super, it is definitely something worth considering, especially if you do not consider yourself to be a financial expert. The decisions you make now can make a big difference to the amount of money you have available in the future, and the best way to get them right is to speak to someone with experience and expertise.
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