More than $12 billion presently sits with the Australian Tax Office (ATO) in unclaimed superannuation balances.
Yes, you heard right. BILLION with a B.
To put that into perspective, in Australia currently, the total net worth of Elon Musk (founder of Tesla and SpaceX aka straight baller) is sitting tied up with the Australian Government as unclaimed superannuation monies as a result of people not knowing they have it.
The Two Most Common Ways Your Super Gets Lost
- Changing Jobs – Each time you start a new job, your employer will set you up with their own default superfund (sometimes even if you nominate another one!). With the average worker today staying at each of his or her jobs for 3-5 years, the average Australian could potential have over TEN different super funds over their working life if they are not combined. Because we tend to ‘set and forget’ with super, it’s easy to leave money behind when you start a new job. Before you know it, you can build up many small super accounts.
- Moving House – If your previous super funds don’t have your up to date personal and tax details, they’ll have no way of notifying you before your super gets sent to the ATO as “unclaimed superannuation balances”.
Benefits Of Combining Your Super Accounts
Your super works harder when it’s in one fund. The benefits of only having one consolidated super account include:
- Less paperwork and administrative work. Remember that time is your greatest asset (CHECK OUT: The World’s Most Valuable Commodity: Time)
- Your total super balance will be bigger when you retire. Fees and charges can potentially erode your retirement savings and eat into your retirement nest egg and ultimately income. By combining your super accounts, you will only pay one set of fees and charges and you will no longer pay for unnecessary insurances and other costs on old accounts.
- Easier to control, manage and keep track your total super savings. This will help out in retirement planning when you need to know how much superannuation you actually have!
Things To Consider Before Consolidating Your Super
- Be cognisant of any fees (termination or edit fees) or taxes you may incur before leaving your other funds.
- Insurances held won’t automatically be brought across. You need to review the correct type/amount of insurances you might need/replace when you combine super funds (I’ll be sure to do a blog post on this in due course).
- When choosing your preferred fund, make sure your employee can pay into it and it has the services you require e.g. good investment types and platforms.
How To Get Your Super Together?
This is the easiest and quickest way to move all of your super into one account. It will take you 5 minutes and will save you lots of $$$ in the long run (Just imagine compound interest on fees – SEE The Eighth Wonder Of The World: Compound Interest).
- Step 1: Create a myGov account then link the ATO to your account.
- If you already have a myGov account, just log in and click through to the ATO section.
- Step 2: Go to the ‘Super’ tab. In this section, you can:
- see details of all your super accounts in the one place, including any you have forgotten about
- see details of all your super, including super the ATO is holding on your behalf
- Step 3: Choose the fund you want/prefer to transfer your money from (called the ‘transferring fund’) and the fund you want to transfer your money to (called the ‘receiving fund’) from the funds listed.
- Step 4: Confirm your selection and your funds should move your accounts into one account within a few days.
- Step 5: Tell your employer. Make sure they know where to pay your super and how to correctly identify you to the fund.
Don’t let your super get lost. When consolidating your super, don’t just choose the fund with the highest balance. The best fund for you may be one of your small accounts, or a completely new fund. Consolidating your super fund accounts takes a bit of effort in the short term but will reward you in the long term.
Feel in control and watch your super grow.