Money Bite-Size Read:
- Super or superannuation is how we fund retirement in Australia.
- Most of us have more than one super account, which costs money in added fees.
- Here’s how you can be richer in retirement by doing one thing, namely to consolidate your super into one account.
The MoneyBites Take:
Taking the time to consolidate your super can add up through putting your money in one high performing account, with less fees.
Let’s talk about the thing we love to put off until later: super.
Super or superannuation is how most young Australians will retire. According to the Australian Tax Office (ATO), your employer puts this money aside if you make more than $450 per month. The rules on super change regularly, so check the ATO website for the latest updates each tax year.
The problem is most of us collect super accounts like shoes.
According to the ATO, a whopping 74% of us had more than one super account in 2020. We often have so many super accounts because we don’t actively choose a fund and and just go with our employer’s default fund.
While millennials in particular often get labelled as uninterested and unengaged with their super, you can start to take steps to sort out your super. One of these steps is taking the time to consolidate your super and merge that collection of super accounts into one cherished item.
Here’s how you can take steps to consolidate your super:
1. Where is my super?
If you’ve had a series of part-time jobs while studying, you may have many super funds if you selected the default fund option. You need to find your super accounts by going through your old employment paperwork. The ATO also helps you find lost super if your account is inactive.
2. What are the T&Cs of my accounts?
Now you’ve found all of your super accounts, it’s time to look at those terms and conditions. This includes looking at the exit fees you’ll have to pay and any insurances, such as income protection cover that you might want to keep.
3. Should you consolidate your super?
Over a third of all super accounts are unintended multiples, which cost members $2.6 million a year in unnecessary fees and insurance. If in doubt, it might be worth seeing a financial advisor for independent financial advice on your specific situation.
4. How do I find the best super fund?
Just because you’ve had your super fund for a while, that doesn’t mean you should stick with them. Instead, take steps to find the best super account for you, including looking at a comparison website for different fund options.
5. How long does it take to consolidate your super?
It takes around 5 minutes to find and consolidate your lost super. You simply go to the ATO government website and use the ATO’s online services through your linked myGov account. From here, you can consolidate multiple eligible accounts into one account.
6. Why does my employer need my super fund?
Your employer is the person responsible for putting money aside for your super. Therefore, you need to tell your employer where to pay your super when you change super funds.
Consolidating your super means having your retirement money in one place.
By taking the time to consolidate your super, you can save money on duplicate fees and insurances. Look at where your super is and start planning now so that future you can retire comfortably as the best-dressed grandparent in the retirement home.