Ignoring costs means paying the price in retirement

While future earnings from most investments cannot be known with precision, fees are known - or should be. And when they are known, they can be controlled. But those saving for retirement do not take a lot of notice of how much they are paying to their super fund, let alone take steps to reduce fees.

Everyone knows about the power of compounding on investment returns, but fees also compound. Over a working life, the difference between high and low super fees makes a big difference to the eventual size of the retirement nest egg. It is estimated that paying 1 percentage point more in fees results in a retirement benefit worth 20 per cent less over 30 years.

Here are a few pointers on how to keep fees low. Holding several super accounts can be costly. That's because, usually, each account will have a fixed-dollar fee regardless of how much money is in the account.

One of the easiest ways to reduce fees is to consolidate super accounts. Think about whether you really need to be paying higher fees for the choice of 20 investment options, most of which you are unlikely to need.

Another potential trap is starting a self-managed super fund with too little money. Most experts say the absolute minimum needed for a DIY fund is $200,000.