Saving for our retirement is an essential part of financial planning. Superannuation or our retirement fund is something that we all know we should be planning for. In most Western countries, once people start working and earning money, it is mandated that both they and their employers contribute a certain percentage of their wage towards superannuation.
Typically, your superannuation funds are inaccessible until your age reaches 65, but you are still allowed to manage it according to what you want and need.
There are lots of superannuation services that are available for you to choose from. It is up to you who is more appropriate and beneficial for your needs. Here are some of the services that are available to you.
- Industry Funds: The Industry funds are run by the unions or employer associations. This fund is made solely for the benefit of its members. There are no shareholders in this kind of fund unlike the Retail or Wholesale Fund.
- Wholesale Master Trusts: Wholesale Master Trusts are also known as the Retail funds and are managed by a financial institution or firm for a number of employees.
- Retail Master Trusts: A Retail Master Trusts is run by a financial institution or firm for a certain individual.
- Employer Stand-Alone Funds: Employer Stand-Alone funds are made by the employers for their employees. Each fund is structured individually and may or may not be shared by employees.
- Public Sector Employees Funds: Public Sector Employees Funds are made by the government for government employees exclusively.
- Self-Managed Super Funds: Self-Managed Super Funds or SMSFs are created for a group of five or less people. They are supervised by the Australian taxation office and follow a strict rule. Each member of the SMSF is called a trustee and a member of the fund too. In contrast to traditional superfunds, you have the power to choose specific types of investments that suit your lifestyle and circumstance. The only caveat is that you need to do so within the compliance regulations of the government.
- Small APRA Funds or SAFs are also created for a group of 5 or less people. But compared to the SMSF, the SAF has approved trustees but they are not members. SAF is controlled by the APRA and not the ATO (SMSFs are controlled by the ATO).
These superannuation funds services sometimes require you to seek help from professionals who knows the laws and regulations that you need to follow.
SMSF and SAF in particular are funds that you will manage yourself and professional advice is highly suggested to ensure your success. Using this kind of superannuation funds will need a lot of knowledge to manage it properly. Experts are knowledgeable and are aware of the ever-changing rules and regulations that apply to transition to retirement. You may choose to inquire from financial planners, lawyers, auditors, or accountants that specialize in superannuation.