Superannuation investments have become a critical aspect of many Australians’ financial plan yet there are still some myths and misconceptions surrounding this form of investment. Here are some of the most common myths we have heard about superannuation investments from our clients at Blue Diamond Financial and the truth behind them:
Myth #1: Superannuation is Only for Retirement
One common myth is that superannuation is only helpful when you retire. While it is true that the primary goal of superannuation investments is to grow your retirement nest egg, superannuation can also provide financial security during unforeseen events such as accidents and illnesses. In such times, you may be able to draw on your super to meet your needs.
Myth #2: Superannuation Investments are Risky
Some believe that superannuation investments are high-risk but the truth is that superannuation funds invest in various asset categories, including cash investments, bonds, property and shares. These investments reduce the risk of losing all your money in one investment vehicle. It is important to remember that just like any investment, risks and returns are inevitable. However, sound investment decisions and proper diversification can decrease the risk associated with super investments.
Myth #3: All Superannuation Funds Offer a Similar Feature
Not all superannuation funds are created equal! Each fund has different features, fees, investment strategies and performance. Researching the different types of superannuation funds is crucial when deciding which one suits your needs. It is also important to ensure that your super fund offers flexible features such as insurance options, the ability to switch investment options and low fees to help you get the most out of your investment.
Myth #4: Superannuation Investments Cannot Be Accessed Until Retirement
Many people believe that you cannot access your super funds until retirement but certain circumstances like financial hardship, terminal illness or redundancy may allow you to access some or all of your super funds before retirement. It is important to consult with a financial advisor before accessing your funds early as early access may result in tax liabilities.
Myth #5: Superannuation Investments are Only For the Wealthy
The last myth we will cover is that superannuation investments are only for the wealthy but this is not the case. Most employed Australians have a superannuation account their employer contributes to and there are even options for those who are self-employed or earning irregular income to start their own super fund.
It is important to separate facts from myths and misconceptions surrounding superannuation investments. With proper education and financial advice, you can make sound decisions that will benefit your financial future. If you need more information about superannuation investments, contact us.
Join us at our upcoming event Things You Need to Know About — (Investing, Superannuation & Retirement) on Thursday, 30 May! We will be covering the essentials about investing, managing your superannuation and planning for retirement. Get more information about it here!
