Consolidating your superannuation isn’t just about convenience – it can result in thousands of dollars in extra savings. According to a recent study from the Association of Superannuation Funds of Australia (ASFA), the average person needs $42,953 a year to live comfortably in retirement. In other words, every dollar counts! Thankfully, it’s now much easier to roll multiple super accounts into one place. Here’s what you need to consider.
Lifehacker has partnered with ING to help rescue your superannuation.
Yes I know. I’m freaking out too, which is why it’s so important to know where your superannuation actually is.
We’re all guilty of tuning out as soon as someone starts talking super. It just doesn’t seem all that relevant when your retirement is still so far away. The thing is, if you’re not putting energy into saving for your super now, it’ll be way too late by the time it does seem relevant.
One of the things you can do to become more super-savvy is to review what super you have, think about what you need from your super and assess whether your super is living up to that. Yes, I know you’re probably guilty of ticking that ‘use employer’s super fund’ box every time you start a new job. I know because I’ve definitely done it as well.
One of the problems in doing this is that each fund is taking out their own fees, so you could be charged double or more fees (which come out of the super you’ve earned) for no reason if you don’t put in the effort to find out where it all is.
Not to mention you may even be paying for several life insurance policies you may not need or want anymore. No joke, if you never specifically opted out of default insurance you could be paying $300 to $2000 a year from your super into Life and Total and Permanent Disability (TPD) insurances.
If you’re thinking of consolidating your super accounts, you need to do a little research first to make sure it’s a good idea for you. Consider where future employer super contributions will be paid, any fees you may incur with the rollover, whether you’ll lose any current insurance benefits from your existing providers and which super fund makes most sense for your situation. Discussing any potential super strategies with an accountant or financial adviser is always a good idea.
Once you’ve done the legwork and if you’ve determined consolidating is the right option for you, the good news is it may not be as hard as you’re thinking. Once you’ve picked a super fund, you can make the switch online at myGov. Many super funds also have consultants who help and guide you through the process.
I did it myself last year after putting it off for about 10 years and was genuinely shocked how simple it all was. Then I was pretty annoyed at myself for not having done it sooner.
The next step for me to become an actual adult? Keep an eye on the amount of money in this super account — but one step at a time.
This article was sponsored by ING (ING Bank (Australia) Limited ABN 24 000 893 292, Australian Financial Service Licence 229823) and written by POPSUGAR. It’s also general in nature and does not take into personal circumstances, objectives or needs. Make sure you consider the appropriateness based on what you need and your financial situation.