The Great Super Fund Cop Out

Throughout our working lives, we are told that we need to ‘trust’ the super fund system. Designed to provide Australians with wealth in their retirement phase, I have serious concerns about who the Superannuation system is actually designed to serve.

The latest reports out of the $2.8 trillion Australian superannuation sector are that the fees are continuing to increase. Over the past year, super fees have increased by 10%, which equates to a whopping $32 million as an additional expense.

The average superannuation fund member is now paying 1.23% of their account balance in fees, jumping from 1.17% at the end of 2017.

Australians are being hoodwinked out of billions of dollars every year in high fees, poor investments, low returns and expensive insurance but yet this system remains ‘compulsory’.

I have always equated superannuation with a way for the government to garnish one-tenth of your wages to government coffers while also removing your right to determine how you spend your hard-earned income.

So what options do you have?

Well, the first option is to abolish the compulsory component of superannuation. Believe it or not but idea has been thrown around government quite often, with Tony Abbott calling our current superannuation system “intergenerational theft”. Imagine the economic growth Australia would see with a $2.8 trillion dollar injected back into people's pockets.

This would not only help carve away the countries deficit but also breathe some new life into the superannuation system which has become bloated, distorted and a detriment to Australians who are forced to participate.

The second option is Self Managed Superannuation Funds, with continuous increases of superannuation fees, family trusts have been steadily growing in popularity. Self Managed Super Funds (SMSF) are not only for the wealthy anymore, but they are also for the financially savvy.

With investment lending at an all-time low and superannuation fees climbing skyward, it only makes sense that investors would look to free up SMSF monies as a means to secure more investment properties.