Investing In The Best Superannuation Fund

Best Superannuation Fund

Depending on your work status, superannuation is a retirement savings plan that you can gradually build up using monthly contributions paid by your employer, by you or your spouse. Because a super fund is not guaranteed nor insured by the government deposit insurance scheme, you need to choose the best superannuation fund to take care of your investment.

Things to consider

As with all types of investment, a super fund has its advantages and risks which may be controlled by a skilled fund manager. The nature of the trustees of the fund influences much of your decision to invest in the best superannuation fund. Here’s why:

* Strict super laws: Super funds are governed by strict rules found in laws and the trust deed. Government agencies such as the Australian Securities and Investments Commission (ASIC), Australian Prudential Regulation Authority (APRA) and Australian Tax Office (ATO) regulates and enforce legal standards to protect the members and their contributions. A super fund must comply with existing rules and laws in order to qualify for tax concessions such as the lower income tax rate of 15% and to avoid heavy tax and legal penalties. Ensuring compliance with existing laws through maintenance of accurate records, minutes and important documents for the review of the regulatory agencies is an important role of the trustee.

* Long term investment: When you join a fund, you will contribute money while you are working and won’t be able to access that amount for many years until you reach the minimum age of retirement. The ability of the professional fund manager vital because your money is exposed to risk and loss in the meantime.

* Investment strategy: Spreading your risks by investing in a good mix of safe and high risk investments prevents huge losses through counterbalancing of assets. The best super funds are invested in cash, bonds, shares of stocks, and properties. Within each type of asset you should also find diversity in sectors of the market, companies and even of the economy.

Other features such as insurance coverage, total and permanent disability insurance and guaranteed payments accompany the best superannuation fund. You can learn more about the investment strategy, asset mix, insurance benefits, and rules on availing the benefits of a particular fund by reading its prospectus well before parting with your hard earned money. And because investments take time to grow, it’s best to start building your retirement fund now.