Superannuation: 3 Things you need to consider

[dyna]

, I doubt many 20 year old's care about that issue

With 10.5% of their own money, currently going into a superannuation fund every 1/4 , eventually all of them will slowly have to begin to query things like : Choosing the right fund in the first instance ( The single most critical decision any of them will ever make re : saving for retirement )
Fees and charges in comparison to Industry Funds or Not For Profits funds .
Performance over the medium to long term .
The pros and cons of paying for expensive Insurance through a Superannuation Fund .
It is very basic , elementary financial information. Extremely simple to understand. If young people do not take an interest in this rather dull stuff, their financial futures will be very bleak , indeed.

 

[InsvestoBoy]

1. A large chunk of contributions was going towards insurances that wasn’t necessary, by my calculations the insurance had lowered the possible balance by over $200,000.

That is wild.

Can you share your calculation?

I just checked my super insurance, death+TPD is $530/y which compounded yearly for 30 years at 10% would be something like $80k.

 

[Value Collector]

That is wild.

Can you share your calculation?

I just checked my super insurance, death+TPD is $530/y which compounded yearly for 30 years at 10% would be something like $80k.

The one where the possible difference was $200k had life insurance and income protection insurance I think something about permanent disability, from memory I think they were paying a little over $200 per month, I think I used 25 years for the compound interest calculation.

Also keep in mind that $530 / year you say you pay, can add up to over $320,000 over the possible 50 years time frame is some had super from when they were 18 to 68.
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I believe if you want insurance, you should not be using your super to pay for it, shop around and buy the insurance out of your pay check, then you will know if you really want it, rather than just ticking a box.

Even if super is the cheapest insurance, you should be making extra contributions to the super to cover the cost of the insurance. Other wise “40 year old you” is dipping into “60 year old you’d” money to pay for an insurance that 40 year old you wants.

 

[orr]

This tangental and only anecdotal to the themes above;
Ten odd years ago I had cause to make a cliam on 'income loss' due to motor vehical accident injury under a compulsary insurance aspect of my (at the time) Industry fund, a component I kept at the bear minimum... Lets just say that it was a very unsatisfactory expirence.
I'd like to know of anyone who has had a 'satisfactory one'.
The onerousness of the legalise is developed to make every aspect more time than it's worth.
If there's a Union worth starting? It would be Insurance paying SuperFund members. That might go a ways toward cleaning up the act.



The scope for malfeasance in this area of the super industry was made clear by how little attention it was given in the Banking Royal Commission. From memory it had a hour or two on one afternoon.

 

[Belli]

In regard to @orr's post, I assume those in industry funds in particular are aware of the changes to income protection which occurred a couple of years ago.

Major changes to income protection cover from 1 October 2021

In January 2020 we wrote about the significant changes coming to new income protection insurance policies in Australia, with some of these changes due to take effect from 1 October this year, and at least one measure delayed for 12 months. In this article is a summary of what is changing and why...

www.bdo.com.au

 

[divs4ever]

Hidden fees are a super problem​

Hidden fees are a super problem

Most Australians don’t realise they are being charged up to six different types of fees on their superannuation. These fees can be opaque and hard to compare across different funds and investment options.

www.firstlinks.com.au

yep .. that is why i invested in wealth managers early in my investing adventure ( rather than their products/services )