In the world of superannuation, it is not uncommon for individuals to end up with multiple super accounts. This can happen for a variety of reasons, such as changing jobs frequently, not actively consolidating accounts, or simply not keeping track of all the accounts opened over the years. While having multiple super accounts may not seem like a big deal at first, it can actually have several drawbacks and complications in the long run. In this article, we will explore the concept of multiple super accounts, the potential issues they can cause, and the importance of consolidating them.
The Problem with Multiple Super Accounts
Having multiple super accounts means that you are paying multiple sets of fees, which can eat into your overall super balance over time. These fees can include administration fees, investment fees, and Insurance premiums, all of which can add up significantly over the years. Additionally, having multiple accounts can make it harder to keep track of your overall super balance and investments, leading to potential confusion and missed opportunities for growth.
Lost Super
One of the biggest issues with multiple super accounts is the risk of losing track of some accounts altogether. This can happen if you change jobs frequently and forget to update your super details with each new employer. Lost super accounts can be challenging to recover, and in some cases, the funds may end up being transferred to the Australian Taxation Office (ATO) as unclaimed super.
Insurance Duplication
Another issue with having multiple super accounts is the potential for Insurance duplication. Many super funds offer Insurance options, such as life Insurance, total and permanent disability (TPD) Insurance, and Insurance/”>Income Protection Insurance. If you have multiple super accounts with different funds, you may be paying for the same types of Insurance multiple times without realizing it.
The Benefits of Consolidating Super Accounts
Consolidating multiple super accounts into a single account can have several benefits. Firstly, it can help you save on fees by eliminating duplicate sets of fees from multiple accounts. This can result in a higher overall super balance in the long run. Consolidating accounts can also make it easier to track your super balance and investments, giving you a clearer picture of your retirement savings.
Streamlined Management
By consolidating your super accounts, you can streamline the management of your super and reduce the time and effort needed to keep track of multiple accounts. This can make it easier to make informed decisions about your super investments and contributions, ultimately helping you reach your retirement goals more effectively.
Improved Investment Performance
Having all your super in one place can also make it easier to manage your Investment Strategy and potentially improve your investment performance. By consolidating accounts, you can choose a single fund with Investment Options that align with your risk tolerance and financial goals, rather than spreading your money across multiple funds with different investment strategies.
How to Consolidate Super Accounts
Consolidating super accounts is a relatively straightforward process. You can consolidate your super accounts by:
- Contacting your current super fund and requesting a rollover form.
- Providing your current fund with details of your other super accounts that you wish to consolidate.
- Completing the rollover form and submitting it to your current fund.
- Your current fund will then transfer the balance of your other super accounts into your chosen fund.
It is important to note that before consolidating super accounts, you should consider any potential loss of Insurance coverage or benefits that may result from closing certain accounts. It is always a good idea to seek advice from a Financial Advisor or super specialist before making any decisions about consolidating your super.
Conclusion
Having multiple super accounts can create unnecessary complexity and fees that can impact your retirement savings in the long run. By consolidating your super accounts into a single fund, you can streamline the management of your super, save on fees, and potentially improve your investment performance. If you have multiple super accounts, it may be worth considering consolidating them to simplify your financial affairs and ensure you are making the most of your retirement savings.