Mark your calendar. The Australian Financial Year runs from July 1 to June 30. Most of us are guilty of ignoring our superannuation, but this year, why not include a super health check before June 30?
Latest figures show duplicate account fees and insurance premiums have eaten into our savings by over $2 billion, lost superannuation amounts to $17.5 billion, and one third of us simply haven’t been paid what we are entitled to. Now is a good time to start planning for the next financial year.
So, whether considering consolidating multiple accounts; claiming lost superannuation or checking you’re being paid employer contributions, take a moment to consider a few simple steps that can help set up your superannuation for the future.. Early action could make a real difference to the amount of your retirement savings.
1. Consider consolidating multiple accounts to avoid duplicate fees and insurance premiums.
In 2018, the Productivity Commission identified 10 million unintended multiple superannuation accounts – that’s one-third of all super accounts.
2. If you’ve ever changed jobs, check if any of the lost super held by the tax office is yours.
At 30 June 2018, there were a total of over 6.2 million lost ATO-held accounts, with a total value of $17.5 billion
3. Check you’re being paid the super you are entitled to.
Employers have three months to pay into an employee’s super account, so a wage slip may not reflect the actual payment. If your super doesn’t add up, let them know.
4. Personal Contributions.
Your employer pays you 9.5% of your ordinary-time salary in super contributions. But the law allows you to boost your balance, to make additional personal contributions to your super which may be tax efficient. Please do check with your accountant or tax advisor.
If you have Raiz Invest Super you can direct your Raiz Rewards to your Super account with over 180 brand partners paying you forward when you shop online. This means your weekly shopping could be growing your retirement fund automatically.
Make one-off voluntary contributions at any time.
Recurring Personal Contributions
With Raiz you can also set up recurring voluntary contributions via the Raiz Super home screen – daily, weekly or monthly.
5. Check you are “super” protected.
Starting 1 July, the government’s ‘Protecting Your Superannuation’ laws will see automatic life insurance potentially being removed from members whose accounts have been inactive for 16 months or more. The aim of the super changes is to prevent costly fees, which bank up over time, eating up balances on inactive accounts. “The Protecting Your Super changes will help reduce account erosion through the additional fees and insurance that come along with unintended duplicate accounts.
The attention is on the fact that the changes are coming on July 1, however more than half of Australians are unaware and an estimated 3 million people could be affected, which would lead to a loss of their insurance money. You can read more about the changes here.
6. First-time buyers’ super.
The government allows first-home buyers to direct up to $30,000 in voluntary [above the 9.5 per cent employer payment] contributions to save up to $30,000 for a home deposit through super at the rate of $15,000 a year. So, if you are thinking of using this scheme, make sure you make a voluntary contribution to kick off the process this financial year.
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The information on this website is general advice only. This means it does not consider any person’s investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product.
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