Happy New Year! With all the pandemonium of the holiday season, your super is probably the last thing on your mind. However, this is precisely the right time to think about implementing some strategies to increase your super for the coming year. With some simple, no-cost strategies such as finding your lost super, consolidating your super accounts, and making sure you're in a fund that's performing well, you will be well on your way to a comfortable retirement.
Among all the chaotic festivities of the holiday season, our thoughts may turn to goals and resolutions achieved during 2019. Career successes, reaching fitness goals and life milestones are all causes for celebration. While most of us wouldn't even think twice about our superannuation, now is the perfect time to put some resolutions in place to increase your super for 2020. After all, it is what we'll be relying on in retirement, and even small improvements now could mean extra luxuries later.
Building up super doesn't always have to mean making monetary sacrifices now, there are some simple solutions to making sure you're getting the most out of super at no cost. Strategies include finding your lost super, consolidating your super accounts, and making sure you're in a quality fund in terms of performance.
Currently, there are 5.8m individuals (36% of the population) with 2 or more super accounts. Every year, the ATO launches its postcode "lost super" campaign to help raise community awareness of lost super. As a consequence of the 2018 campaign, more than 66,000 people to find and consolidate over 105,000 accounts worth over $860m. For this year's campaign, the ATO has created tables of lost and unclaimed super per state and postcode that anyone can access.
If you think you've got lost super, you can then log into myGov to claim the lost super and have it consolidated with your active account.
Finding and consolidating your lost super with your active account means you'll pay less management fees and other costs, saving you in the long term. Between 1 July 2014 and 30 June 2019, 2.6 million accounts to the value of $15bn have been consolidated by fund members using ATO online services. This includes 540,000 accounts to the value of $4.4bn that were consolidated in the past year. The figures indicate that more and more people are taking advantage of this no-cost strategy to grow their super in the long term.
Another easy way to grow your super is to make sure the super fund that you're putting your money into is performing well. Recently, the regulator of super funds, APRA, released "heatmaps" that provide like-for-like comparisons of MySuper products across 3 key areas: investment performance, fees and costs, and sustainability of member outcomes. The heatmap uses a graduating colour scheme to provide clear and simple insights that unlike a sea of numbers on a spreadsheet, will send a clear and strong message to users.
For example, MySuper products delivering outcomes below the relevant benchmarks in relation to investment performance and fees and costs will be depicted from pale yellow to dark red. The sustainability measures provide an indication of a trustee's ability to provide quality member outcomes and address areas of underperformance. While the ultimate purpose of the heatmap is to have trustees with areas of underperformance take action to address it, they can also be an invaluable resource in choosing the right super fund.
Think you may have lost super? Perhaps you'd like to consolidate your multiple super accounts into one? Or maybe you'd just like to find out whether your super fund is performing at the right level for your retirement? Contact us if you need assistance.
IMPORTANT: This communication is factual only and does not constitute financial advice. Please consult a licensed financial planner for advice tailored to your financial circumstances. Email us at Robert Goodman Accountants at firstname.lastname@example.org. © Copyright 2020 Thomson Reuters. All rights reserved. Brought to you by Robert Goodman Accountants.