INHERENT DEFICIENCIES
Since its introduction in the early 90s, government experts have continually tinkered with super regulations, supposedly to fix identified problems within the industry. One would assume that after 30 years, any issues preventing individuals from optimising their super for retirement have been identified and resolved.
Unfortunately, this does not appear to be the case. The government may have punished those players found guilty of breaching regulations, but this has still not improved how individuals manage their super for optimal outcomes.
The default management of super as a personal asset has inherent deficiencies, which means it will fall far short of being optimised.
AN OPTIMISED LIFESTYLE IN RETIREMENT
In case there is any lack of understanding in the title of this paragraph, it is a statement of purpose defining the importance of super as applied to individual circumstances.
Super is a means of compulsory savings intended to fund each worker’s lifestyle in retirement.
Your super is a valuable personal asset. Failing to manage it appropriately can have significant long-term financial consequences.
KNOWLEDGE LIMITATIONS
Your final super balance dictates your income in retirement and the subsequent lifestyle you will be able to lead.
Due to financial knowledge limitations, most individuals do not appreciate the implications of not understanding the deficiencies delivered by all products regarding growing their super.
Most individuals do not possess such specialised financial skills, and the acquisition of such skills would indeed be a full-time occupation. Those who fall into this category can benefit from engaging with a financial professional that offers valuable yet affordable super optimisation advice.
Optimal management of your super asset can result in around 20% more income in retirement when compared to the default product model approach.
SUPER MODELS
The super service model you choose can have significant financial consequences, yet most people are unaware of the different product categories and service models operating within the superannuation space.
There are two super service models:
- Product Model – Offers general advice about your selected product. It does not consider your circumstances or offer a strategic plan to meet long-term goals and objectives.
- Adviser Model – Offers personalised strategic advice that can be cost-effectively limited to optimising your super or comprehensive of your complete financial situation.
Despite its dominance, there are many flaws in the Product Model, the main one being an absence of personalised service at an individual account level.
PERSONAL JOURNEY
Like life, super is a personal journey. Financially, you may now be starting to realise the importance of your super.
Many individuals often regret not paying attention to their super earlier in their career once they realise the compounding dollar value cost of missed opportunities.
From age 45 onwards, your time horizon to significantly improve your projected income in retirement starts diminishing.
Regardless of whether you have made past mistakes or missed opportunities, you can always decide to better manage your super and financial situation from now until retirement.
SUPER REVIEW
Create a secure SuperWiser account using your email address, complete a free super review and examine your options.
Alternatively, call 1800 467 467 to speak directly to an adviser.
This document was prepared and issued by Super Simpler Pty Ltd (ABN 74 150 240 421) a privately-owned company operating as a Corporate Authorised Representative (CAR No. 468 201) of AXIS Financial Group Pty Ltd (ABN 21 092 889 579, AFSL 233 680). The information contained within it is not advice. It provides general information only and does not take into account your individual objectives, financial situation or needs. You should assess whether the information is appropriate for you and consider talking with your financial adviser before making an investment decision. Information in this publication, which is taken from sources other than Super Simpler, is believed to be accurate. However, subject to any contrary provision in any applicable law, neither Super Simpler, nor its employees and directors, provide any warranty of accuracy or reliability in relation to such information or accepts any liability to any person who relies on it.