Superannuation is probably the most valuable investment you own that you don’t know about.
When 9.5% of your salary goes there, it’s worth taking a closer look at where your money is going.
Not convinced yet?
Well, the Association of Super Funds of Australia found the average superannuation balance at time of retirement (assumed to be age 60 to 64) in 2015-16 was $270,710 for men and $157,050 for women. It’s a decent sum of money!
Super is often forgotten about because you can’t access it until you’re 60 (if you are born after 1 July 1964, and have no special circumstances e.g. financial hardship) and because it can seem overwhelming.
But the sooner you make sure your super is in a good place the better because of the magic of compounding (it’s not really magic, it’s just maths 🤓).
1 Find your superannuation
Register for the Australian Taxation Office’s online services via myGov. You’ll need your Tax File Number and to verify your identity, either through bank accounts or previous tax returns.
Once you’ve set up your account you should be able to see how much you have in each of your super accounts (the information may be a couple months out of date, but hey it’s a good start).
2 Consolidate your accounts
Ok so maybe you have a couple of different accounts, does it really matter? Yes! You’re probably getting charged admin fees for each account 😧 and if you’re with the default option for your fund (which the vast majority of us are) you’re basically paying fees to different people to own very similar things.
The Productivity Commission found that unintended multiple accounts costs $2.6 billion a year in unnecessary fees and insurance 🤦🏻♀️.
So if one account is enough which one should you go with?
Did you know that the difference between a high performing and low performing account could be worth $400,000‼️
You can check out superannuation comparison websites, which we did. Did you know some of them receive fees for referring you to certain companies and products, and others sell their ‘awards’ or ‘ratings’ for advertising purposes? 🤷🏻♀️
So then we went straight to the source and looked at the Product Disclosure Statements (available on the fund’s website) and the statistics from APRA, the government regulator (here if you’re interested). There’s a lot of information out there.
Want to know what we’ve found?
Now you might be thinking, but I’m a special snowflake, how on earth could you find the right account for me?
Again let’s go back to the Productivity Commission’s report “a ‘no frills’ product with low fees that is allocated to a balanced (or balanced growth) portfolio is likely to meet the retirement needs of most Australians during the accumulation phase.” The accumulation phase is their term for anyone who’s still accumulating super, aka anyone still working.
💡How fortunate because that’s what we’ve looked at 😏💡
Want our guide to what we’ve seen to be the best performers with lowest fees? Drop us a note at firstname.lastname@example.org
You could spend hours searching on the internet, or you could get a head start. We’ve also covered what you should be looking out for so assessing whether your super is any good should be so much easier 😁