Our grandkids’ super accounts were frozen. How else can we invest for them?
Superannuation accounts set up for grandchildren can become frozen and are often impractical due to ongoing fees and contribution requirements. Experts advise that super is designed for retirement, not childhood savings, and simpler investment options may be more suitable for young children. Alternatives like savings accounts, investment accounts, or insurance bonds offer greater flexibility for funding education or other life milestones.
- ▪Superannuation was not designed as an investment vehicle for children and can become frozen without regular contributions.
- ▪Fees and management costs can erode balances in children's super accounts if contributions are not maintained.
- ▪Experts recommend using more accessible options like savings accounts, investment accounts, or insurance bonds for children's long-term savings.
- ▪Superannuation becomes more effective once a child starts working and receives employer contributions.
- ▪Flexibility is important when saving for children, as funds may be needed for education or major life events before retirement age.
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Excerpt limited to ~120 words for fair-use compliance. The full article is at The Sydney Morning Herald.