Ask Paul: Our super fund is terrible and we'll never have enough to retire


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Q. My husband and I have had super/life plans with a large insurance company for many years.

We are 56 and 55 years old and we are not going to be able to retire. We are contributing about the same amount that we are paying in fees each year.

We have raised four daughters in the country on minimum wages. But we have managed to get them through university and helped them with a car.

ask paul clitheroe can't afford to retire

Now that they have all left home and shouldn't need our financial help, we are really concerned that we have been contributing to a fund which has not benefited us at all.

We do not have any money in the bank as we live pay to pay, still paying our mortgage and a personal loan.

We just need some direction, or I am afraid we will not be able to retire. I have purchased Money and read an article on super and realise now we are in trouble. - Lyn

A. I am really disappointed to hear about your experience with super, Lyn.

I am unsure if you have been in an older, expensive fund but you say it has been taking out fees equivalent to your contributions, which is a huge concern.

As you read this, the new Australian Financial Complaints Authority (AFCA) will be in operation. I'd give it a call on 1800 931 678 (free) to discuss your situation to see if there is any redress available to you.

Regardless, it sounds as if you are in a terrible fund and you need to get into one that is much better suited to your needs. Low fees are important but as your kids have grown up you may need less insurance. It gets expensive as we get older.

It seems to me that with any surplus income, paying off that personal loan is important, as is trying to clear your mortgage before you retire.

Parents are not good at this but I do also think a family chat about your situation would help you and your four daughters.

I appreciate you don't want to ask for help, and you may not have to, but I do think that honest "money talk" inside families is incredibly helpful.

Money is all too often a secret and this helps no one.

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Paul Clitheroe AM is founder and editorial adviser of Money magazine. He is one of Australia's leading financial voices, responsible for bringing financial insight to Australians through personal finance books, the Money TV show, and this publication, which he established in 1999. Paul is the chair of the Australian Government Financial Literacy Board and is chairman of InvestSMART Financial Services. He is the chair of Financial Literacy at Macquarie University where he is also a Professor with the School of Business and Economics. Click here to ask Paul your money question. Unfortunately Paul cannot respond to questions posted in the comments section. Please view our disclaimer here.

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