When it comes to Superannuation, and we want to achieve early financial independence, we need one which combines the two golden rules: low fees, and index funds asset selection. So why on earth have I chosen AMP Super? And what are the other aspects to consider in Superannuation?
Fees. First. Always. In this area, industry superannuation seems to be the best. A nice collection of which to select can be found here.
Second: asset allocation: I have personally chosen index funds with a mix of index bonds (70%/30% – Why this split will be discussed in another blog post). Some great articles around asset allocation and its importance can be found here and there.
AMP isn’t best at either of them BUT, my company pays for some important other fees/protection that we haven’t discussed so far: Death, Total and Permanent Disablement (TPD) and Temporary Salary Continuance (TSC). These are essential protection you need to offer your loved ones in case you were permanently ill or even die. And my corporate plans offers me a cracker of a deal: Death, TPD and TSC all free of charge and paid for – Around $700 per annum.
Why is it such a great deal? Death and TPD would cover all debts that we have and even more. My wife could stop working and still be covered for at least 2 years and a half of living expenses.
My TSC would cover 150% of our living expenses, should I become permanently ill. These are non-negotiable priorities and the best choice for my family. I probably would pay more if I were to switch to another super fund and chose the same levels.
We want to make the most obvious choice when we select our superannuation but also taking our own situation into account is very important. In my specific case and the corporate deal I got, I can confirm that industry fund would not offer the same level of protection.
So what do we need to take into account?
1/ Fees – all – such as annual fees for your investments but ALSO your Death, TPD and TSC
2/ Asset allocation.
3/ Consider ALL your options (corporate, government plans, etc etc…)
Anything I missed? Helpful? What super do you have and why have you chosen it? Leave your comments below