What Fees do I have to Pay?
Everybody who invests in super funds has to pay fees and capital gains tax when they sell their investments; however the amount of fees you pay will depend on many things. The actual amount of fees you pay on your superannuation funds will depend on the total amount of funds you accumulate and the number of superannuation account you have. In addition, the fees you pay will also determine if you have invested in a standard or premium fund. The PDS or Product Disclosure Statement will elaborate on the exact fees you pay for your investments.
Fees to Look Out for When You are Comparing Superannuation Funds
When you compare superannuation funds you should not only compare the returns you get but also the fees you pay since most people do not realize that these fees can often pile up and reach a substantial amount. Some of the funds that may be applied on your superannuation investments include the following.
- Establishment fees to start your super account and fund.
- Contribution fees when you voluntarily contribute part of your salary to the fund.
- Withdrawal fees when you voluntarily withdraw an amount from your fund.
- Termination fees when you decide to close your fund permanently. Termination fees are also charged when you want to close one fund and join another one.
- Investment fees when you want to change the investment options in your current fund.
- Advisory fees when you opt for the help of a financial advisor who charges for providing sound advice.
- Management fees when there is any administrative work or paper work related to your fund. Various types of fees fall into this category and these include member fees, investment management fees, administrative fees, issuer fees and expense recovery fees.
- Other miscellaneous fees that may be charged to your super fund include maintenance fees relating to property or direct investments, insurance premium fees and transaction costs when you buy, sell or switch your investments.
Other Things that You Must Consider
- The amount of fees you end up paying will vary from one fund to another which means that some funds may charge more fees than another fund. While it may seem that the fees you are paying are minimal always remember to compare fees since over a period of time, these fees will build up and have an impact on your investments and saved up funds.
- While comparing fees is important and will help you save money, you should also consider the returns you get and the amount of tax concessions you receive. Although it may appear that super funds charge fees for every small thing, in reality super funds investment is the best way to invest in an organized fashion for your retirement especially if you do not have any other investments or assets. The fees you pay will come out of your pocket but the tax concessions and other benefits you get from super funds often make up for the amount you spend towards fees and miscellaneous charges.