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Why it's time to get selfish about your superannuation
Major super funds have been joyously announcing their annual returns for 2022-23, and as they do so it provides an important opportunity for you to stop and take stock of your own super.
First published in The Sydney Morning Herald and The Age here.
Major super funds have been joyously announcing their annual returns for 2022-23, with five big funds last week announcing returns of between 8 and 10 per cent.
As they do so, it provides an important opportunity for you to stop and take stock of your own superannuation, especially if you’re looking to retire in the next 10 to 15 years. After all, if your fund can’t make an average return for a fair fee in one of the sexier years of super, should you really be sticking around?
Superannuation exists to give you a compounding investment return over a long period of time. The more you whack in earlier in life, the more time can work in your favour. The average return of between 7 and 10 per cent per annum will see your superannuation balance double in capital value every seven to 10 years, and this explodes if you contribute actively.
Today I’m going to teach you how to read between the numbers of these annual returns announcements. And once you’ve learnt the three simple lessons, I’ll show you how to benchmark your fund’s performance using the numbers from some of Australia’s largest funds.
How did your super fund perform in 2022-2023?
The S&P/ASX 200 ended the financial year up 9.2 per cent, and with most balanced and growth funds invested broadly in Australian shares, it makes sense that 2022-23 returns will be similar.
What nobody is talking about is that in the same year, inflation was running close to 7 per cent, so most funds are only just ahead in real terms. Given this, while it’s important to understand the topline performance of your fund in 2022-23, take it lightly. This is the least important number.