If you only take one thing out of this, it’s that your super is your money!

Superannuation has been in the news a lot recently, and there have been many discussions on performance and fees. The big challenge it seems is getting people involved in an asset that they won’t be able to access until the legal retirement age.

The majority of Australians aren’t aware of the fees, insurance covers and performance of their chosen super fund, and they end up paying unnecessary costs. Another area of concern is that many Australians have lost super as they’ve moved from job to job, and haven’t consolidated along the way.

A large number of superannuation companies don’t make it easy for you to interact with your super either, with confusing websites, jargon and irregular communication. Thankfully in recent years, the financial services sector has paved the way for new financial technology companies, that are trying to change up aspect of finance by bringing in innovative products and services. There are a number of superannuation companies that are trying to do things differently, and are really focus on educating and engaging their members.

I chatted to Madeleine from GROW Super about some of the big questions young people have about their super, and how they can make their own decisions when it comes to their biggest asset.

GROW Super is a new Australian superannuation company who want to make super simple and easy to use, and make sure their members understand exactly what their money’s up to. You can access your super via a mobile or online app, with options to invest your spare change and choose investment options in areas that matter to you.

What exactly is superannuation and why should I care about it?

Super has been made out to be incredibly complicated, but it doesn’t have to be that way.

Taking it back to its very purpose — your super will be your salary when you retire — and that makes it much easier to understand just how necessary it is. The pension is unlikely to be what it is when we’re all ready to retire, so it’s your best interest to take note so you can make informed decisions.

What could my superannuation be invested in, and do I have a choice?

You should absolutely have a choice in where and how your super is invested. After all, it is your money. At GROW we offer members seven core portfolio options to choose from. This is where a minimum of 85% of your super will be invested. They range from 100% growth assets, down to a conservative 30% growth + 70% defensive asset allocation. The way your money is invested is likely to change over time and GROW give you the options and tools to do just that.

Further to this, we allow users to invest a safe portion of their super into industries that matter to them. This is capped at 15% (with the rest being invested in fully diversified portfolios by the experts — Dimensional Fund Advisors), and members can opt to take a ‘Tactical Tilt’ into industries such as Internet & Startups, Sustainability, Property, Green Energy and Industrial Tech.

How early should I start contributing to my super?

It’s like going to the doctor at 55 years old and asking “Hey Doc, am I on track to be fit and healthy when I hit 60?” If you haven’t been looking after yourself with exercise, diet and the right lifestyle choices, chances are their answer will be “No”. At that point, it’s going to be harder to get fit, become regimented around diet, and cut out bad habits that have been with you for five decades.

The same thinking applies to your super. If you go to a financial planner at 55 and ask how things are looking for your future retirement if the news is bad it’s going to be difficult to crawl back to a comfortable future from there. The sooner you get your financial health in check the better.

It’s never too early to start contributing to super, and you should make the most of compounding interest over the long-term.

What are some of the differences between traditional super companies and more recently started ‘FinTech’ super companies?

Until recently, we don’t believe there’s been much change to super companies since superannuation became compulsory in 1992. The big players haven’t had to work hard to acquire members, resulting in companies that we believe aren’t customer-centric.

With new players coming into the space, we’re seeing technology-first companies — but to be honest, anyone can build a great looking app. So innovation and change is far more than that. It’s about educating users, giving all Australians access to high-quality investment options, and giving them visibility and choice around what’s likely to be the biggest sum of money they’ll ever get their hands on.

The average Aussie is going to be over $300K short when it comes to retirement — yet we’re not seeing a hell of a lot of people talking about this. For us, it’s vital that people know where they are and where they’re heading, but more importantly what they need to do to reach their goals.

It’s vital that people know where they are and where they’re heading, but more importantly what they need to do to reach their goals.

Don’t forget that your super is your money!

Learn more about Grow Super and what they’re doing to shake up the super industry over here. Please note that How To Money reached out to GROW Super for educational purposes only, this is not a paid review or advertisement.

Kate

Want to learn more about money and personal finance? Check out our article archive, the How To Money Podcast and the Australian Finance Podcast. Catch us on Twitter @HowToMoneyAUS and Instagram on @HowToMoneyAUS.

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