Consolidate Your Super – Don’t Pay More than You Should

If you’ve had more than one job in your life, chances are you have a few super accounts - you may have even lost track of some of them! Consolidating your super is about finding all your super monies and moving them into one account – so you can get clear view of your super and really start to make your money work for your retirement.

The difference over 30 years for an investor who has one fund with a balance of $7,200 and annual administration fees of $60, compared to an investor with six super funds, each with balances of $1,200 and annual administration fees of $60 each, is around $14,000.

Learn more about consolidating your super in three easy steps:

Benefits of consolidating your super

The biggest advantage of combining your super accounts is the potential savings in administration fees. Generally, the larger your super account balance the smaller the proportion of fees you’re charged for that account. So if you’re paying a number of account fees, you can reduce the amount of fees you pay by reducing the number of super funds you have. Another advantage of consolidating your superannuation is less paperwork. Having one super account means you only have one set of paperwork to manage. This could make it easier to keep on top of your super and understand exactly how it’s performing. By adopting a more focused investment strategy, you might end up achieving a better return on your investment and work towards a fulfilling retirement.

Consolidating your super is not just about saving money in administration fees, it’s also about giving your super the potential to really grow. With the power of compounding returns, the money you save in fees could really help grow your super balance.

Things to be aware of before moving your money

There are some things you should consider before you move money out of a super fund. Firstly, check to see if your super fund charges you an exit fee?. This means you could incur upfront withdrawal or exit fees for moving your money out of these funds. Depending on the number of super accounts you currently have, your upfront exit costs could end up being higher than your total savings in administration fees.

Secondly, your decision to move money out of a super fund could impact the level of insurance cover you had through that fund. It’s possible your insurance cover could be discontinued when you move between funds, or you may not be able to obtain equivalent cover in the new super fund. It is recommended that you check any exit fees that may be payable to your other fund(s), and any insurance cover you may have that cannot be replicated, before making the decision to move and consolidate your money.

Once you have weighed up the benefits against the costs of moving super funds and do decide to consolidate; here are a few tips to keep in mind:

How do I consolidate my super?

Consolidating your super can be made easy depending on the facilities that your super fund of choice has to provide. For instance, check with your super fund of choice if they have any tools which can provide you the required forms that need to be sent to your other super funds to authorise the transfer of funds to your new fund account.

Otherwise simply get the ‘Request To Transfer’ form relevant to your super account of choice and fill this in to get the ball rolling with the consolidation of your super funds. Just make sure you have the right proof of IDs attached to your forms to help your new super provider organise the account.

Doing what’s best for you, and your super

There are new rules designed to keep super safe from money laundering and terrorism-financing for all Australians. This means proof of identity is required to move money around the super system. It’s a small extra step in the process to protect your money. Proof of identity can be as simple as a certified copy of your driver’s licence or passport. If you don’t have either of these documents, contact your new super provider to get more information. There are other documents that can be certified as proof of identity.

Find your lost super

One in three Australians have lost or unclaimed super, totalling almost $12 billion as mentioned by ASFA media release on the 21st of December 2007.

The Australian Tax Office (ATO) provides a free ‘SuperSeeker’ service to help people locate super accounts they’ve lost track of. If you’ve changed jobs more than once, chances are you’re likely to find some super money through the ATO.

SOURCE: bt.com.au