Welcome to my video series where we tap into the key personal finance topics for Australians at home and abroad.
Today let’s explore consolidating your superannuation.
For many of us we’ve worked in multiple jobs throughout our career and this will likely mean that we’ve got more than one superannuation fund.
In fact, nearly 1 in 2 Australians has more than one fund, and 6 million of these accounts are considered either lost or ATO-held super funds.
Of these 6 million accounts, that equates to a staggering $18 billion, or thereabouts, in lost superannuation, so let’s consider why you should explore consolidating your super, and how you can identify any lost superannuation funds that could be yours.
Why Should I Consolidate My Superannuation?
Consolidating your super means combining multiple accounts into one, and there are many reasons you might want to consider this:
One, it reduces the administrative burden, which means less paperwork, less reporting and less things that you have to keep on top of.
The second key benefit is it allows you to track your superannuation much easier. If you’ve got one account, compared to three, you can actually access how it’s performing and benchmark it against relevant peers, and make sure that it’s working hard for you.
Three, it can reduce the administrative cost. Fees and other expenses can be particularly damaging if you only have a small amount inside your superannuation fund.
The fourth key benefit is that it may mean you don’t need to pay for multiple insurance policies that may or may not be valid.
What Should I Consider?
There are many benefits to consolidating your super, but it’s important to do your homework, so let’s discuss what you explore before you consolidate your superannuation.
There are many things that you’ll want to check out before you consolidate your superannuation funds. We’re going to discuss five of the top things that you should explore before you go through this process
The first of these is to check if it’s either a Deferred or Defined Benefit scheme – if it’s either one of these, it’s highly unlikely that you’ll want to make any changes to this fund.
The second is to check out any life or total disability insurance policies or income protection policies that you hold within your super fund. They may be quite low cost and you may not be able to access the same levels of cover or types of cover through a new fund.
The third thing that you’ll want to check out is to ask your employer if they can actually make contributions. This is obviously far more relevant if you’re working in Australia.
The fourth thing that you’ll want to explore is if you have any pre-existing health conditions, because if you do this may limit your chances to get new cover through a new fund.
Fifth, of course, check out any of the costs that are involved in consolidating your super and rolling out of any existing funds.
How Do I Consolidate My Super?
Let’s explore exactly how you go about consolidating your super.
Now that you’ve done your homework and you know which superannuation funds you’re going to roll out of and which fund you’re going to roll into, it’s time to check that you don’t also have any lost superannuation accounts.
You can generally do this through your MyGov account. If you don’t already have a MyGov account, head to My.Gov.Au and go through the setup process. You will need your Australian Tax File Number here to be able to access the relevant details.
The next step is to complete the relevant rollover paperwork with the receiving superannuation fund. This is the fund that you’re rolling your super into. What you’ll need here will be the names of your existing superannuation fund providers and your account numbers. They may also ask you for some additional details which you’ll need to complete.
If you any questions at all about your superannuation, which fund you should roll it into, or if you’d like us to review your superannuation, feel free to reach out to me on the contact details provided.
Likewise, if you have a key personal finance question that you’d like me to explore in a future video, let me know, and I’d be happy to consider it.
To Your Financial Success!
Jarrad Brown is an Australian-trained and qualified Fee-Based Financial Planner with Australian Expatriate Group of Global Financial Consultants Pte Ltd providing specialist financial advice and portfolio management services to Australian professionals in Singapore. Jarrad Brown is an Authorised Representative of Global Financial Consultants Pte Ltd – No: 200305462G | MAS License No: FA100035-3
Australian Expatriate Group is a division of Global Financial Consultants in Singapore providing specialist advice to Australians living abroad.
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General Information Only: The information on this site is of a general nature only. It does not take into account your individual financial situation, objectives or needs. You should consider your own financial position and requirements before making a decision.
*Please note that Jarrad Brown is not a tax agent or accountant and none of the content outlined here should be taken as personal advice. You should consult your tax agent and financial adviser to review your current personal finances and financial goals to consider whether this strategy is appropriate for you.