Superannuation funds make record return
Superannuation funds have had their best year this century with a record return for 2013.
Australians now have $1.5 trillion invested in their retirement but we are being urged not to just leave it on auto-pilot.
The average, balanced superannuation fund has risen by 15-and-a-half percent. However, it follows a white knuckle ride through the global financial crisis which saw returns plunge 20 per cent, losing an estimated $160 billion.
With the recent recovery, the last ten years evens out to seven per cent annual growth. For a comparison, $100,000 invested in 2003 would have grown to almost $170,000 by 2007. The wipe-out two years later saw it worth just $125,000 but now, that figure is around $200,000.
Research manager at SuperRatings, Kirby Rappell said: “It's been really driven by Australian shares and international shares. They've both had a fantastic year. Shares are up 20 per cent, international shares about 30 per cent.
“After 2013's strong performance by everything from property to shares, the general feeling is this year thing will cool off a bit and super funds will be no different. With early expectations, 2014's returns could be more like the ten year average of seven percent.
The message to the government is simple: keep the rules consistent.
National Seniors chief executive Michael O'Neill warned: “We're very concerned that consumer protection measures that have been introduced are being wound back. Investors are also being urged not to set and forget, with super funds now easier to compare.
January first saw the beginning of MySuper accounts - designed to be simpler and cost-effective.
“You’ve also got to look at the level of fees you're paying because they can differ quite wildly between funds,” said Choice chief executive Alan Kirkland. They can be eroding returns you're making.
“MySuper is a safe path to tread if you really don't have the time and energy to engage in going through the detail and working out the best place to put your money.”
MORE INFORMATION
www.moneysmart.gov.au
www.ato.gov.au/Super/
www.strongersuper.treasury.gov.au
www.superratings.com.au/
