5 Step superannuation check

Since you can’t access your superannuation until you reach a “Condition of release” which is for most people is retirement and that may be a long way off for some – it’s something many people tend to “set and forget”.

However, to ensure you have a comfortable retirement, investing in superannuation is virtually essential. We know keeping track of your superannuation can seem an impossible task. So, you’ll be happy to know that by following these five simple tips, you will know the status of your super balance and can rest in the knowledge that it’s safe and growing into a valuable nest egg for your golden years.

STEP #1 – KNOW EXACTLY WHERE YOUR SUPER IS

Answer this simple question: Have you had more than one job or have moved house and forgotten to let your super fund know? If so, you’re not alone. And, you may also be one of the 5.7 million Australians with a lost super account. As of June 30th, 2016, there is over $14 Billion in lost super just waiting to be claimed by its rightful owners. Fortunately, finding out whether some of that lost cash is yours is quite simple. All you need to start the process is a MyGov account which is linked to the ATO. Just click on the ATO section and go to the “super” tab. Here, you’ll see detailed summaries of all your super accounts – even those you’ve forgotten about. If you do find lost super, you are probably best to consolidate it into one account although be mindful of the potential loss of any insurance cover before you start. This way, you’re only charged one set of fees and there’s far less paperwork. You also have a consolidated view of your retirement nest egg and can manage how it is invested more easily.

STEP #2 – CLOSELY MONITOR YOUR SUPER STATEMENTS

Most super funds will send you a statement at the end of each financial year. This annual statement contains information on:

• Your current balance

• Any contributions you made to the fund during the year

• Insurance cover you have with your super fund

• Fees and current performance

When checking your statement, ensure your employer is paying the correct super rate on your behalf. Remember, your employer is required to pay 9.5% of your salary into your super fund, each quarter. However, like many Australians, you may be affected by superannuation guarantee (SG) non-compliance. Simply check the status of your super account via MyGov, to see whether your employer is paying the required amount.

STEP #3 – EXAMINE YOUR STATEMENT CLOSELY

Your super statement details how your retirement savings are progressing. So, when you receive your annual statement, examine it carefully. Pay close attention to:

• Personal details – ensure your address and contact details are correct.

• Balances – does the current balance look right, when taking the starting balance, employer contributions, investment returns and fees into account? If something doesn’t look right, contact your super fund.

Personal contributions – If you’re making personal contributions (directly or through a payroll deduction), ensure they’ve been received by your super fund.

• Insurance – Many superannuation funds will arrange life and disability insurance, for an additional fee. This insurance for accidents and illness can help you and your family feel secure if something should happen. Ensure you are covered for what you need and aren’t paying for something you don’t need.

• Tax – Employer and salary sacrifice contributions and investment returns are taxed at 15% (except for high income earners that may be 30%). If you’re paying a higher tax rate than this, your super fund may not have your tax file number. Check with your fund and provide these details.

STEP #4 – CONSIDER GOVERNMENT SUPER CONTRIBUTIONS

If you’re a low- or middle-income earner, you may be eligible for a savings boost through the government’s super co-contribution scheme.

The super co-contribution is a government payment you may receive if you make personal (after tax) into a compliant super fund account. This payment is deposited directly into your super fund. There’s a maximum income limit, which is indexed each year. To receive the maximum co-contribution payment ($500), you must earn less than $37,697, higher threshold $52,697 or less, and make a personal super contribution of at least $1,000 during the financial year. If you make a personal super contribution of less than $1,000, the government will match up to half of your payments, depending on how much you earn. To be eligible, the minimum amount payable is $20. If you earn over $37,697 the co-contribution amount reduces by 3.33 cents in every dollar, until the maximum income limit is reached. In this case, the maximum limit is $52,697 for this financial year.

General Advice Disclaimer

This article contains general advice only, which has been prepared without taking into account the objectives, financial situation or needs of any person. You should, therefore, consider the appropriateness of the information in light of your own objectives, financial situation or needs and read all relevant Product Disclosure Statements before acting on the information. Whilst every care has been taken to ensure the accuracy of the material, Paradigm Strategic Planning or WealthSure Financial Services Pty Ltd will not bear responsibility or liability for any action taken by any person, persons or organisation on the purported basis of information contained herein. Without limiting the generality of the foregoing, no person, persons or organisation should invest monies or take action on reliance of the material contained herein but instead should satisfy themselves independently of the appropriateness of such action.

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