How do fees impact Super over time?
Super funds charge management and investment fees for handling your money, and whule the amounts may seem small they can significantly affect your balance over decades. It is imperitive that people, particularly young ones, should pay attention to the fees they are paying in their Superannuation account.
Typical fees include:
Administative fees: taken for managing your account. Different super funds charge different rates.
Investment fees: taken for running the investment option you have chosen.
Insurance premiums: Taken to cover life, ddisability or income protection if you have selected these options. Some funds have this by default and many customers do not even realise.
For example, even a 1% annual fee difference can reduce your super balance by tens of thousands of dollars, over your working life. To conceptualise that, think about it in simple terms. a minor change in fees is likely the difference between being able to buy a brand new car in your retirement or not. That’s why comparing funds is important. Lower fees, consistent investment performance and transparency can all make a major difference to your retirement lifestyle.