A light-hearted look at what you could be missing out on if you haven't found and combined your super.
By Sophie Hicks Lloyd
Can you think of anything more boring than spending precious time hunting around for old superannuation accounts? No, neither can I. When I have spare time I want to shop online, get a manicure or sleep. Or plan dream holidays to Italy that aren’t about to happen anytime soon but are insanely enjoyable fantasies to play out nonetheless. Needless to say, there are many things I’d rather spend my time on.
However! It has become apparent to me in recent times, (since working for a company which sells superannuation, and which regularly markets to people like me reminding us that it may be a good idea to combine1 all your super into one account) that it might just be a good idea to move all my super into one account.
Why? I hear you say. Stop preaching to me about boring super-fund-stuff that I am not interested in and doesn’t matter to me for about another 80,000 years. Stay with me good people, there could be holidays to Europe in this.
You see, most super accounts have fees, the more accounts you have, the more admin fees you’re probably paying. So rather than paying five sets of admin fees, (because you still have accounts from your first job at the chemist, your second job at the cake shop, your third job at the hardware shop, your fourth job at the recruitment firm and your current job) it might make sense to only pay one set of admin fees and save your money.
And the beauty of saving money when it comes to super, is a little more saved today, could mean you’ll have a lot more later. And the more I think about it, the more I think I need quite a bit of cash stashed in my super account. After all, I’m really not interested in swanning about in Florence without a bit of cash to burn in Prada. Am I. No.
If you want to spend as little time as possible on combining your super you might want to try BT’s Easy Rollover Tool. It’s quick and easy. If you think you might have lost track of some of your super, completing a super search is another good idea. You can do that here.
You see I don’t know about you, but I quite fancy the idea of spending quality time travelling each year when I retire, maybe even dabble in a bit of e-commerce. Designing and building that fabulous garden I’m wishing I had, being able to indulge in nice food and wine and spend the time I don’t have now, on luxurious things like long weekends on a whim, lazy lunches with friends and all day movie marathons when the vintage Sex and the City movies are occasionally rolled out.
And when you think about how long we might live given how fabulously healthy we all are with our endless stream of yoga-pilates-green juicing – marathon-running-mindful-raw-eating-carb-avoiding fads, we may well live to 100. Or god forbid even longer. Ick. Imagine the crows feet and jowls one might have accumulated by 109. Anyway, just say we live til 100, and just say we retire at 65, then we need to fund our living expenses for 35 years. That’s a lot of years of funding overseas travel, good food and wine, entertainment and hobbies.
So that’s the thing. It’s estimated that a single person will need $430,0002 to fund a comfortable retirement and this doesn’t include any overseas trips. Ok admittedly we may well lead more modest lifestyles by that age, and with any luck some of us might not even have a mortgage any more. But it’s still a lot of cash to have squirreled away.
One way we can save for the annual sojourns to the islands off Sicily where we will consume endless wine and cheese, is to start making voluntary contributions to our super. Think of it as saving for the future. Putting away some money for that very sunny day on a beach watching those insanely handsome Romans frolicking in the sea.
If you’re like me and you haven’t a clue what you’ll need and whether you’re on track, you can use a retirement calculator to get an idea of how much you need to save. You can also find a financial adviser who can help you understand why tipping a bit more shoe money into your super now might help deliver a more fabulous post work lifestyle. BTs Adviser View is an interactive website where you can search for a financial adviser by location. You can also check out comments and ratings from other people like you. Quite handy actually. So go forth and save my friends, that cocktail in that piazza in Milan is counting on it.
The latest batch of 2015 BT graduates is ready to get moving in life. How does this smart, ambitious group of millennial men and women view their future?
This information is current as at 08/06/2015.
1. Before requesting a rollover, you should consider where your future employer contributions will be paid (if your employer contributions are currently being paid to another fund) and check with your fund(s) to determine whether there are any fees, including exit or withdrawal fees, for moving your benefit, or other loss of benefits (e.g. insurance cover), noting that you may not receive the same type or level of benefits after the rollover.
2. Source: ASFA Retirement Standard, March 2015. Figures are in today’s dollars using 3.75% AWE as a deflator and 7% return and assume the retiree will draw down all their capital, and receive a part Age Pension based on the means test as of May 2015.
This information does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. Information current as at 20th May, 2015. BTFG Financial Planners are representatives of Westpac Banking Corporation ABN 33 007 457 141 AFSL & Australian Credit Licence 233714 (Westpac). BTFG is a Division of Westpac. These projections are predictive. Whilst we have used every effort to ensure that the assumptions on which the projections are based are reasonable, the projections may be based on incorrect assumptions or may not take into account known or unknown risks and uncertainties. The actual results may differ materially from these projections. Superannuation is a long-term investment. The government has placed restrictions on when you can access your preserved benefits. The Government has set caps on the amount of money you can add to superannuation each year on a concessionally taxed basis. In addition, the government has set a non-concessional contributions cap. For more detail, speak with a financial adviser or visit the ATO website.