Saving Money

Most tradies in Australia will have their superannuation with one of the big industry funds, but it’s also worth considering the other options out there.

In this guide we will take a look at the different types of super available to tradesmen and the important information that you should know.

What is Superannuation?

We all know basically what superannuation is. Essentially it is a form of forced savings to ensure that we have money for our retirement and don’t have to rely solely on a government pension.

It is also a very tax effective way of saving. We won’t go into the technical details here, but saving money inside your super rather than outside of super can save you many thousands of dollars in tax every year.

Types of Super Funds

There are three main types of superannuation funds available to tradesmen. There are industry funds, retail funds and self-managed super funds.

There is no single fund type which will be best for every tradie. Ultimately the right fund for you will depend on your own current situation as well as your needs and objectives.

We’ll take a look at the three main fund types below.

Industry Funds

Most tradies here in Australia have their super in an industry fund. Some of the well known industry funds include CBUS, Host Plus and Australian Super.

Industry funds are known for not paying commissions to financial advisers and also having relatively low fees. Over time they have also been shown to have decent investment returns.

One of the downsides of industry funds for many years was the lack of investment options, however this has changed in recent times with many catching up to their retail fund counterparts.

Retail Funds

Retail super funds are those which are run by the big financial institutions such as AMP and MLC.

In the past these funds where known for their higher fees and commission paid to financial advisers, however with commissions on super now outlawed this is no longer an issue.

Trade Insurance

Retail funds are generally more popular with tradies who are looking for more features and flexibility with their super. They may be willing to pay slightly higher fees in return for more benefits.

Another major benefit of a retail fund is the ability to package your trades insurance within the fund. This means you can access a comprehensive range of insurance products and have them paid from your super fund.

Self-Managed Super Funds

The self-managed super fund (SMSF) sector has grown rapidly over the last decade, and they are becoming increasingly popular with tradies.

An SMSF gives you total control over how your retirement savings are invested, and is the only type of super which allows you to borrow money within your fund to invest in property.

With most tradies working in the building and construction industry, using their super to invest in property has become an attractive option.

Super for Subcontractors and Self-Employed Tradies

Once you’ve chosen a type of fund which is right for your needs you also need to consider how you need to be contributing to your fund.

If you are an employee on wages this will be managed by employer, but if you are a subcontractor or run your own business you will need to manage your own contributions.

Super can get a little tricky in this area, so it is probably best to speak with your accountant or financial adviser to see what your super obligations are as a self-employed tradesman.

More Information & General Advice Warning

Here at Trade Risk we are not financial advisers, and all information within this guide is provided as general advice only. You should never act upon any of this information yourself without first speaking with a qualified professional.

Although we cannot provide superannuation adviser directly through Trade Risk, we do have close partners who can assist you with advice on your super.

For more information please call us on 1800 808 800 and we will put you in touch with our superannuation expert. He has dealt with dozens of Trade Risk clients in the past and will be more than happy to assist you.

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