Is your super scattered all over? If so, what about any insurance you hold inside it? Get super savvy today by bringing it all together into one account, so you can be better off tomorrow.
Lower fees, less paperwork and a better strategy – consolidate your super and you may stand to achieve all three benefits.
All in one
Most of us have more than one super account, often because of job changes. Or we have ‘lost’ track of super accounts we have accumulated over the years. And, that’s how Australians have, on average, three super accounts per person.
Among the many reasons to consolidate, the issue of fees is important. Super fees can add up, especially if you are paying multiple member fees across multiple accounts. Over the long term that could mean a lot of money. Instead of paying double or triple the costs you need to, you could be better-off keeping your money in one account where it can compound into more retirement dollars.
Keeping track of different accounts can also be time consuming and the energy required to wade through all that paperwork could be better spent on deciding on a super-related strategy that can maximise your retirement benefits.
Insurance inside super
Another important point to consider when consolidating is what happens to any insurance you hold inside super. Holding insurance within super can be convenient and tax effective, mainly because of the various concessions you may get when making super contributions, and because of the various funding methods you can use to meet the cost of premiums. What’s more, you may be able to get cheaper insurance premiums in larger funds, because of economies of scale.
When it comes to consolidation, it’s important to remember that unlike super, insurance is not automatically transferred. When you leave a fund any cover held for you may even be cancelled. Also, if you hold insurance cover within several super fund accounts, this could mean paying out more insurance premiums than necessary.
Discuss the implications for you and your family, and whether you can obtain comparable cover in the new fund. There may even be new requirements to meet; for example, you may be asked to undertake more medical tests.
A few easy steps…
It might make sense to put all your super money into one account now, and let it accumulate for as long as possible. This way, your money could be working harder over the long term with one investment strategy and a widening investment base.
Here’s a simple guide to help you get started:
1. Choose the super fund best for you, and if you need some guidance, your financial planner can help. You’re building a portfolio of investments, so consider:
- your attitude to risk
- suitable investments
- how long your money will be invested
- the available insurance options
- if you need to keep any existing insurance.
2. Contact each of the super funds you want to withdraw your money from and provide them with:
- details of your chosen fund so they can transfer your money
- certified copies of your personal identification.
Alternatively, you can go to the receiving fund and have them contact the existing funds for this information.
3. If you choose a fund other than the one your employer currently pays your super into, you’ll need to:
- ask for a Standard choice form to complete or download one from the Australian Taxation Office website (ato.gov.au)
- provide a letter of compliance from your new fund (most super funds have a copy on their website)
- provide the fund’s Australian business number (ABN) and superannuation product identification number (SPIN).
Your financial planner can help you decide which super fund is right for you, by:
- comparing the benefits of each of your current super funds in view of your own objectives
- considering whether you’ll be charged fees to leave a fund
- finding any lost super if you’ve lost contact with a fund
- helping you understand insurance.
Whichever way you look at it, one thing’s certain – the more you end up with, the better-off you’ll be. So, make your super work for your tomorrow and call us today.
 Australian Institute of Superannuation Trustees (19 March 2012). Media release: Australians still confused about super – poll. Retrieved 21 August 2012 from aist.asn.au.
What you need to know
Any advice contained in this article is of a general nature only and does not take into account the objectives, financial situation or needs of any particular person. Therefore, before making any decision, you should consider the appropriateness of the advice with regard to those matters. If you decide to purchase or vary a financial product, your financial planner, our practice, AMP Financial Planning Pty Ltd and other companies within the AMP Group will receive fees and other benefits, which will be a dollar amount and/or a percentage of either the premium you pay or the value of your investments. You can ask us for more details.