Bonus?

The idea of switching funds to chase a retirement bonus may seem tempting, but it’s essential to consider the broader picture.

money, the long-term performance of your fund, in terms of consistent returns and low fees, could outweigh the benefts of a modest one-off bonus. Considerations Before Chasing a Bonus

Before switching super funds, it’s important to weigh several factors:

• Consistency of Returns: A fund with consistently strong returns might be more benefcial over time than a one-time bonus.

• Fees: Ensure the fund’s fees don’t erode the value of any bonus.

• Eligibility: Check the fne print on eligibility, waiting periods, and bonus structures.

• Investment Choices: Some funds reduce or eliminate bonuses if you switch to lower-risk options like cash or bonds.

The Growing Trend of Retirement Bonuses

While only one-third of super funds offer retirement bonuses today, the trend is growing. In 2017, only three funds offered this perk, but more funds are starting to adopt it as competition for retirement savings increases. It’s likely that bonuses will become more common in the future as funds seek to retain members and attract new ones.

The Bottom Line

If your super fund offers a retirement bonus, it’s a welcome boost to your savings as you transition into retirement. However, before considering switching funds for the sake of a bonus, weigh the pros and cons. A consistent, high-performing fund with low fees may ultimately deliver more value than a one-time bonus.

Make sure to check with your super fund to see if a retirement bonus is available and consider your options carefully as you plan for your golden years.