Get SUPER Organised - but for the Right Reasons
By Melissa Tonellato
Most people have more than one super account. And some people have forgotten about a super account!
Consolidating super accounts is about getting organised, bringing together information and making good decisions about how to invest and protect your super savings. This topic may be boring for some people and you probably already want to stop reading but wait! I can assure you that you will get that feel good feeling once you take control of your money and move those numerous small super account balances into one large account balance.
One of the main reasons to consolidate super accounts is the fee savings. However, before you take a stocktake of your accounts and get the ball rolling, there may be good reasons not to consolidate and keeping two or three accounts open. Preserving insurance benefits is a very good reason not to consolidate. Generally membership with a super provider includes automatic life and total and permanent disablement (TPD) cover and sometimes income protection cover. Advice from a professional in the industry can help you decide what insurance is important to you and discuss options for transferring or replacing insurance if necessary.
How your super funds are invested is something else to think about before you consolidate accounts. Does your fund offer the types of investment options that are suitable to you now and in the long term? Do you want to dabble in direct shares or are managed funds more your style? Or a mix of both? You may wish to hold onto an account that is invested conservatively and use another account for aggressive investing. Or invest in a product that offers all of the above. Again, speaking to a professional in the industry can help with your decision making.
As mentioned above, the main reason to group together your super accounts into one is to save fees. Most fees are a percentage of your account balance plus a flat administration fee. Holding a larger account balance instead of two or three smaller balances will mean only one administration fee. Some providers have a tiered administration and investment cost structure meaning the more you have invested, the cheaper the overall fees are.
It’s easy to lose track of how many super accounts you have as jobs change and personal details change such as an address. Australians currently have just over $14 billion in ‘lost super’. You can search for lost super by logging into your myGov account, linking the ATO and following the steps.
So, get organised. Super organised! But for the right reasons.