The Motley Fool

3 tips for getting the most out of your super

Unfortunately, too many Australians don’t even think about their superannuation at all, let alone actively choose the best superannuation fund for their needs. After all, if it’s out of sight, it’s usually out of mind. But super is still your hard-earned money, even if the government locks it away until your golden years. Even better, super money is taxed less on entry (up to a point) and (usually) tax-free when withdrawn. You don’t get many free kicks in the financial world when it comes to tax, but that’s a big one.

So it’s important to make sure you’re getting the best bang for your buck when deciding where your super is sitting. Here are three simple tips to help you get the most out of your super.

1. Make sure you’re not paying high fees

This is a big one. We heard in the Royal Commission last year how many super retail funds were charging high range fees but delivering below average returns for their members. I’m not saying that retail funds are worse than industry funds or others, but the first thing you should be looking at with a super fund is the fees you are being charged – a high fee can rob you of tens of thousands of dollars over many years, due to lost compound interest.

2. Choose a cheaper investment strategy

Most super funds offer ‘active’ strategies where their investment managers will manage an active portfolio of different investments by default. While some managers can deliver consistent outperformance, for many it might be cheaper to choose an ‘index’ fund that just tracks market-wide exchange-traded funds rather than the ‘Balanced’ or ‘High-Growth’ active options. These will generally be far cheaper than the default options, but offer similar or higher returns – make sure to check with your super fund to see if they offer this product.

3. Make the right investment choice for your age

Most people get placed in the ‘Balanced’ fund as a default, where growth assets like shares are balanced with defensive assets like bonds and cash. However, for anyone under 40, a ‘High-Growth’ or indexed option might be a far better choice, considering you don’t have to worry about capital preservation in a market crash and have plenty of time left working to take advantage of the cheaper prices a crash will bring. Growth options are riskier, but you trade this off with higher returns, so make sure you’re making the best choice for your age and circumstances.

Foolish takeaway

Of course, none of this is meant as a personal recommendation, and you should always check with a financial advisor for advice about the best choice for you. But by making some simple enquiries, you could be saving yourself tens or hundreds of thousands of dollars over a working lifetime.

Check out our favourite dividend shares here on your way out!

NEW! Top 3 Dividend Bets for 2019

With interest rates likely to stay at rock bottom for months (or YEARS) to come, income-minded investors have nowhere to turn... except dividend shares. That’s why The Motley Fool’s top analysts have just prepared a brand-new report, laying out their top 3 dividend bets for 2019.

Hint: These are 3 shares you’ve probably never come across before.

They’re not the banks. Not Woolies or Wesfarmers or any of the “usual suspects.”

We think these 3 shares offer solid growth prospects over the next 12 months. Each of these three companies boasts fully franked yields and could be a great fit for your diversified portfolio. You’ll discover all three names and codes in "The Motley Fool’s Top 3 Dividend Shares for 2019."

Even better, your copy is free when you click the link below. Fair warning: This report is brand new and may not be available forever. Click the link below to be among the first investors to get access to this timely, important new research!

The names of these top 3 dividend bets are all included. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies move – we may be forced to remove this report.

Click here to claim your free copy right now!

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

NEW. Five Cheap and Good Stocks to Buy in 2019…

Our Motley Fool experts have just released a brand new FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.8% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.