Don’t let your boss take care of your independence
Published 1 September 2017
Many of us let our bosses take care of our super, when we should take control of it like a boss, explains Nigel Bowen.
- Many of us are ignorant about our super balance or how much we need to retire on.
- We often settle for default investments, which may be wrong for our stage of life.
- The worst habit we can get into is opening a new super account with every job.
- Spending a little time online is all it takes to fix all that and reap returns.
It’s part of the ritual of starting a new job – you get handed a stack of paperwork, including a super form. Your new employer will likely already have filled in the details of their default super fund. It’s easy to just supply your tax file number and your signature, and hand the super form back to the HR person.
The majority of us do exactly that – but that doesn’t mean it’s a smart move.
As a nation, we haven’t done a good job of educating people about super. ANZ research shows that around 10 per cent of us have no idea what super is for. And around one-third of us don’t know our current super balance and underestimate how much money we need to retire comfortably.
In this context it’s not surprising that most people just sign the super form they’re given. But it’s called a super ‘standard choice form’ for a reason: because it’s giving you a choice. Employers offer their default fund to make things easy for you, but they can easily arrange for that 9.5 per cent of your salary to be directed to any super fund of your choice – and you should make sure they do.
Your money, your choice
Exercising your right to choose your own super fund is important for two reasons.
- You’ll probably move between jobs, especially earlier in your career. If you join your new employer’s default fund every time you do this, you’ll end up paying multiple sets of fees. This helps to explain why we pay $31 billion in fees every year.
- Super funds differ in terms of their fees, their performance, the insurance they offer and even how user-friendly their websites are. Your employer’s default fund might not be right for you.
How hard is your money working?
Once you’ve settled on a super fund you’re happy with, you can choose your investment mix – from high-risk, high-return growth investments; balanced investments; or low-risk, low-return conservative investments.
Generally people tend to choose riskier growth investments when younger, given that they have less money at stake and more time to let their balance level out over their career, and select more conservative options as they consolidate their balance when nearing retirement.
If you don’t select an appropriate investment mix to suit your life stage, you could find yourself earning a low return or alternatively losing money in a market downturn.
If keeping track of your super investment risk and returns isn’t something you’re comfortable doing yourself, certain funds can make life easier by managing it for you through lifestage investment options. ANZ Smart Choice Super is one of these.
Take your super from job to job
ANZ Smart Choice Super also makes it easy to keep your current super account, by providing a prefilled form with all your details that you just need to give to your employer.
To access it, log in to ANZ Internet Banking > select your ANZ Smart Choice Super account > Notify my Employer
Explore how Superannuation can work for you
Super basics
OnePath Custodians Pty Limited (OnePath Custodians) ABN 12 008 508 496, AFSL 238346, RSE L0000673 is the trustee of the Retirement Portfolio Service (ABN 61 808 189 263, RSE R1000986) (Fund) and issuer of the interests in “ANZ Smart Choice Super”, a suite of products consisting of ANZ Smart Choice Super, ANZ Smart Choice Super for employers and their employees and ANZ Smart Choice Super for QBE Management Services Pty Ltd and their employees.
ANZ Smart Choice Super is issued by OnePath Custodians and distributed by Australia and New Zealand Banking Group Limited (ANZ) 11 005 357 522. ANZ is an authorised deposit taking institution (Bank) under the Banking Act 1959 (Cth). OnePath Custodians is the issuer of this product but is not a Bank. Except as described in the relevant Product Disclosure Statement, the obligations of OnePath Custodians are not deposits or liabilities of ANZ or its related group companies. None of them stands behind or guarantees the issuer or the capital or performance of any investment. Such investment is subject to investment risk, including possible repayment delays and loss of income and principal invested. Returns can go up and down. Past performance is not indicative of future performance.
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A small number of employers do not offer choice of fund. If you’re unsure, speak to your employer. More information about Superannuation Standard Choice is available here.