9 February 2009
Super — What is it good for?
Super has become the major investor in our economy and still invests in and underpins the economy in these difficult times. The Association of Superannuation Funds of Australia (ASFA) is the national organisation that represents the interests of Australia’s super funds, their trustees and members. ASFA membership currently represents approximately 80% of total Australian superannuation assets.
In a recent video presentation, ASFA CEO Pauline Vamos explains the vital role superannuation plays in the Australian economy:
How is my super invested?
Pauline: “(For) the average employee, their employer puts in on their behalf, 9% of their salary. So even in these times where we are dealing with a difficult economic climate, that 9% is still going into superannuation. So it’s forced money into the economy. Super funds can’t hold that money. They have to invest that money. They have to invest for the longer term. So that is why particularly in this climate, super provides an important part in keeping a fairly strong base in the Australian economy.”
Are we in Australia better off because of super?
Pauline: “The difference in Australia is this. Super is a long term investment. So that means when you put the money in you are investing in the long term… (Super) does invest in a wide range of assets. Before you take your money out or before you switch to cash, think about a number of things:
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You cannot predict the market. You cannot predict where the market is going. The market goes up but it also goes down.
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You’ll be retired for a long time
You are a long time to retirement, but you’re a long time retired. So even if you’re close to retirement, look at what you need today, what you need in 5 years, what you need in 10 years.
- Your assets will eventually recover
Always remember your assets are there, the value today is lower than it was last year and 2 years ago, no doubt about it. But the assets are still there, and the value will go up. But if you get out you put it in cash, you’ve lost the asset. And that cannot be good long term.”
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