Choosing Your Perfect Super Fund: What Doctors Need to Know

Choosing the perfect superannuation fund for your financial goals plays a huge part in your future financial security.

Depending on the fund that you choose, there could be a big difference in the total balance that you have available to draw upon when you retire. Choose wisely and your investments will pay off, leaving you with a nice comfy “nest egg” for when you retire. Choose poorly though, and you could be left with barely enough to live off of.

As you are probably already aware, superannuation or “super” is a percentage of your pay, which your employer sets aside and pays into your super fund each pay period. This money is added to by your employer throughout your entire working life, to ensure you have enough money to live off of when you retire.

There are two main types of super funds: industry super funds and self-managed super funds (SMSF). Industry super funds work by choosing what they consider to be profitable or worthwhile investments, and investing and reinvesting the money that you pay into your super fund to earn you a return on your investment. This return on investment is also sometimes referred to as a “compound return”.

By comparison, self-managed super funds (SMSF) put you in charge by allowing you to manage your own investments. This means that you’re in charge of deciding exactly what you invest your money in, and developing an investment strategy that puts your financial interests and wellbeing first. In Australia, employers are legally required to make these super contributions (which are calculated as a percentage of your total wage) for all employees aged above 18.

Once money is invested into your super fund, it enters the “accumulation phase” where your superannuation is sitting in your account, and is being invested and re-investing so that it grows in value over time. During this “accumulation phase”, you will have the option to make voluntary contributions by paying money into your super fund yourself, which is another way that you can boost your savings for retirement.

In most cases, you will not be able to access your super until you’ve reached what is called “preservation age” or “retirement age”, between 55 and 60 years of age. There may be some exceptions to this though, with the option to apply to access your super early in an emergency, for example.

There are a variety of different factors that will come into play when you are choosing a super fund, all of which will influence which super fund is best for you. Some of the things you will need to take into account will include your current financial situation, your future financial plans and goals, the level of investment risk you’re prepared to take on, and the types of investments that you want your money to be used for. Like many doctors who work long hours and live a busy lifestyle, it may seem easier to go with your employer’s default super fund. However, by doing this, you could be doing yourself and your long-term financial health a big disservice in the long run.

Instead, consider partnering with an experienced accountant or financial advisor who is knowledgeable about the best super funds for doctors. As a client of Medical Wealth Planning, you will have access to our highly skilled and experienced team of financial professionals who will guide you to make this important decision, with the best interests of your financial future in mind. To find out more about how Medical Wealth Planning can help you maximise your super, book an appointment with us today.