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Super Funds


Advantages of superannuation funds

  • You have experts doing the hard work for you.
  • There are many superannuation funds to choose from.
  • For many superannuation funds, you can set up a regular savings programme and make lump-sum payments.
  • Your resources are pooled with other investors, allowing you to make investments impossible for an individual investor.
  • It helps you to easily diversify your investments.
  • You get the benefits of greater economies of scale, such as reduced transaction costs.
  • Having your savings locked for a predefined period may be an attractive benefit for those people who may be tempted to "dip" into their retirement fund.

Disadvantages of superannuation funds

  • The majority of your savings will be locked for a predefined period.
  • Your family and lifestyle will most certainly change over the years; yet there's little flexibility in a superannuation fund to match such changes.
  • If this is your only investment vehicle, you won't have any diversification across fund managers.
  • The funds will be tax inefficient for those on a marginal tax rate of less than 33%.
  • There are costs over and above those you'd pay if you were investing directly.