A third of all Super Accounts are duplicates their owners might not even know exist.
These fees cost $2.6 billion to Australians each year.
By the time you retire, every Australian will have lost on average of a years’ earnings from this fatal mistake.
Introduced in 1994, Superannuation encourages people in Australia to accumulate funds to provide them with an income stream when they retire.
The royal commission, a review of the sectors regulation and the damning productivity commission report have all exposed a system with flaws.
There’s every sign super will become a headache for the government. They have already flagged a broad review of retirement savings.
Many MPs have been airing their own ideas for how super should be run. Some flagging the idea that low income earners should be able to opt out of super and put that money towards their more immediate financial objectives.
However, legislation is already in place for a move to 10% contributions in 2021 and to 12% by 2025.
The recently released Samuel report into Superannuation called out regulators for failing to stand up for superannuation fund members who are being subjected to poor returns and high fees, eating into the retirement savings of hard-working Australians.
However, 600,000 people now have their own Self-Managed Super Funds. They have taken decided to take on the responsibility of running their own super.
This structure allows them control, flexibility, choice and potential for better returns compared to retail super funds as the main reason for opening an SMSF.
Australians taking control of their future
A growing number of Australians are managing their own Self-Managed Super Funds.
Many are choosing to invest in property to see better returns.
Many are seeing the benefits of buying property through SMSF.
Buying property through your SMSF can be:
- tax effective
- a good way to purchase property, if you don’t have the money to buy property in your own name
- beneficial for business owners
- an effective way to diversify your super investments.
Growth in property market
The recent shift in the property market (seeing 2 consecutive months of growth after a raft of positive changes post-federal election) has some property experts suggesting now is a fantastic time to enter the market.
However, history shows that with property, investing for the long term will see positive returns that make the timing of entry of little importance to overall return.
Borrowing to buy property
If you want to buy an investment property using your SMSF, but haven’t accumulated quite enough super, your fund may be able to borrow the money.
Lenders will generally require your SMSF to have a corporate trustee structure and may allow your fund to borrow up to 80% of the value of a property.
At Dollars With Sense we are dedicated to helping educate Australians to better understand their finances to make their money Work Smarter, Not Harder.
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