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Is my super money safe?

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I’m in an employer super scheme with ANZ — ANZ Super Advantage — and I'm in the ING cash option 100 per cent, is the money safe?

Unfortunately, it’s impossible for me to tell you that any specific super fund is safe. Super funds are regulated and the end goal is to make them safe and capable of producing reasonable returns. They are diversified, which means they’re not totally exposed to the stock market.

The super fund managers, if they have a balanced fund, will have shares, fixed interest products, cash, some property assets and some alternative assets. These latter assets are usually a small amount. If the fund is a growth fund they’re more exposed to shares but can produce very high returns and losses.

An option of 100 per cent cash is one of the most conservative options you can select and the kinds of cash investments are usually very low risk. Selecting this kind of fund means you have no stock market exposure, which means you should get a positive result when most funds are in negative territory because of the stock market rout recently.

You need to contact your fund and ask to speak to someone and ask every question that might be bothering you. We Aussies fail to treat super as a product that we have bought into. You’re the customer, so demand customer service until you’re absolutely sure that the product suits your risk profile.

Have a look at the returns and then go to websites such as SuperRatings and Morningstar to compare how your fund has performed.

Then make sure you know what you’re being charged. A one per cent higher charge over 30 years could cost you tens or even hundreds of thousands of dollars based on how much you invest.

After your house, super might be your most important asset and for many Aussies super could prove to be more important than your house and that’s why you have to understand it, respect it and most importantly, control it.

For advice you can trust book a complimentary first appointment with Switzer Financial Services today.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

Published on: Wednesday, February 23, 2011

The Switzer Super Report is a newsletter and website for self managed super funds. With exclusive commentary from Peter Switzer, Roger Montgomery, Paul Rickard and Charlie Aitken the Switzer Super Report will help you maximise your after tax investment returns and grow your DIY Super. Click here for a free trial or subscribe today.

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