Super product for 24YO w/ minimal existing super?

antmcbane on 21/02/2017 - 14:32
Last edited 21/02/2017 - 14:57

Have just finished university and moving in to graduate role. super contribution from wages ~$15,000/year.

Existing super all with Rest and is around $10,000.

I'm trying to save for a house deposit so wasn't going to go big on extra contributions for a couple of years but would also like to go for more high risk options given my age.

Most discussions I've seen revolve around people trying to kickstart their super a few years later than me. I'm just trying to get a good base foundation.

Am I better off just going for one of the lower cost ones like australian super/anz etc and then selecting my investment profile within? I know the usual advice is "go to a financial planner" but I feel like there aren't too many variables in this scenario so it all should be a much of a muchness.

Thanks for any useful advice.

Financial

Comments

  • battler on 21/02/2017 - 14:54

    I'm a bit confused when you say "Base super contribution from wages ~$15,000/year."
    Super Guarantee is 9.5%, so my interpretation is you will be on $158k/yr… not bad for a grad.

    Or do you mean wages will be 15k/yr?
    Or do you mean 15k is 9.5% of salary + personal contributions?

    • antmcbane on 21/02/2017 - 14:56

      Sorry. % is not 9.5%. Contribution from employer with no personal contributions is 15k.

      • battler on 21/02/2017 - 14:59
        +1

        Lucky you.
        So, given your employer has high rate of employer contributions, do they not also have a preferred/suggested/default super provider?

        • antmcbane on 21/02/2017 - 15:00

          They do but fees seem relatively high and I was leaning towards just using one of the industry providers.

        • abb on 21/02/2017 - 16:26

          @antmcbane: Check that the contribution rate isn't reduced if you swap providers.

          I get 15% super contributions, but only if I use their preferred fund… It's well worth paying the extra fee to get the extra 5% contribution! (in my case)

      • captobvious on 21/02/2017 - 17:51

        federal government? their super is 15.4%

  • Skramit on 21/02/2017 - 15:22

    Go with a well rated fund like aus super and pick the high growth option and let it grow.

    Making any additional contributions in your situations makes 0 sense. Put all your spare cash into saving for a house. Don't lock it away in super.

    • Euphemistic on 21/02/2017 - 15:26

      This. plus as you say, don't make any voluntary contributions as you wont be able to get it back until retirement age.

  • mskeggs on 21/02/2017 - 15:30

    I don't think there is anything to be gained from using a super fund that charges more than the cheapest fees providing they have the investment option you want.
    Since you already have a REST account, and their funds have performed consistently well, I would be inclined to stick with them and put everything in growth.
    If you do that and check it again in a decade you will likely be pleased with the outcome.
    Obviously, past performance is no guarantee, but they seem to be pretty consistent, and fees are low.

    Revisit it when you are older or interested in actively managing your investment, but it looks like a good option in the meantime.

  • serrin on 24/02/2017 - 01:43

    Watch the checkout. Long story short, there's no benefit of high growth, low risk etc, just pick the one with the lowest fees. You can't beat the market, even cats are on par with the best hedge funds and after you factor in cat food vs fees, the cats win. To all the people saying don't do voluntary contributions, it depends if you're going to end up with enough money by the end to retire or not. If you're not going to get there on compulsory contributions (factoring in potential increases in income as you go along), you're going to need to do some voluntary contributions.

    • mskeggs on 24/02/2017 - 18:33

      I can't watch that now, but "Long story short, there's no benefit of high growth, low risk etc," isn't the case at all.
      Super investment will allocate funds towards investments with more volatile prices if people are seeking 'growth'.
      In practice, the growth funds will invest most of the funds in the share market, while the 'capital stable' and other low risk funds will hold substantial amounts in cash or hedged fixed interest.
      You get a lower return with the second, but much lower volatility, and capital safety.

      Maybe the checkout was making the point that there isn't much difference between funds who use a similar investment mix?

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