Is it time to put more into your superannuation fund?
Monday October 13, 2008
As superannuation fund returns have been so poor this year, with many people taking significant losses to their superannuation fund balances, putting more money into a superannuation fund seems like it is inviting disaster. How a superannuation fund works over time is that by investing your funds into reasonably safe areas, your superannuation fund should experience steady growth over time. Adding money to your fund as early as possible can lead to invested money having a greater effect, but it still does matter when you add that money to your superannuation fund.
Adding extra money in a time when your superannuation fund is experiencing losses and looks likely to continue in that manner for a year or more can be throwing money away. It will certainly provide a buffer for your losses, but if you lose the money you add before it has had any time to make money for you, then it makes for a pretty poor investment.
Using an industry superannuation fund or a self managed superannuation fund can provide a massive saving on fees, so if you are trying to reduce the amount of money that is being lost by your superannuation fund, you wish to consider switching types of superannuation funds. In order to work out when adding money to your superannuation fund will be helpful again rather than merely cancelling out losses you may wish to consider consulting a superannuation expert about your specific financial situation.
Please click on our ESUPERFUND sponsor banner if you are interested in starting an ESUPERFUND self managed superannuation fund.
