Is ‘super’ still super?

This week is the 20th anniversary of compulsory superannuation in Australia.

Since its inception we have seen many tweaks and changes as the Government continues to ‘fine tune’ the system for future generations.

Uncertain conditions around the world since the start of the GFC in 2008 have meant that superannuation returns haven’t been as strong recently.

As a consequence of this, many commentators have pointed the blame at the superannuation system.

This makes no sense whatsoever.

Superannuation is a tax structure – not an investment in its own right.  What I mean by this is that superannuation is only a structure for holding various assets and investments.

It is the underlying investments that determine superannuation fund performance – not the superannuation system itself. In other words, market conditions (and therefore fund performance) should be treated separately to the superannuation system itself.

Now that we’ve cleared that up, superannuation still remains one of the most effective structures to build wealth. The combination of tax-effectiveness, asset protection and estate planning flexibility can’t be ignored.

The system has come a long way in its short history and will continue to evolve as the Government introduces more ‘running changes’ to keep it at the forefront of retirement planning structures.

Financial Planning Expert can make sure you are invested in the right super fund. Contact us to review your superannuation arrangements.