Finding Your Lost Super – Every Australian Should Read This
As Money Bulldog has grown from a local personal finance website focussed solely on the UK we have also attracted readers from as far afield as Australia.
With that in mind, here is our resident Australian contributor Raj with the first of two posts especially for our friends Down Under.
Superannuation is a word that regularly grabs the headlines of the business pages. However, there is no doubting that the importance of the nation’s collective savings pool is a front page issue. Why? The total value of the superannuation savings of Australia is a staggering $1.4 trillion. Makes that a couple of billion-dollar budget deficit look fairly paltry doesn’t it?
So why does that number matter to personal taxpayers and savers? Well, the employer superannuation guarantee currently sits at 9% of ordinary earnings, but changes in the law state that that employer contribution to your retirement nest egg will rise to 12% by 2019. But even without that increased contribution, of that $1.4 trillion dollar pie, a whopping $18.1 billion slice currently sits unclaimed in “lost” accounts. Put simply, there are piles of retirement savings collecting dust on balance sheets that may never be claimed, to which millions of ordinary Australians may be entitled.
The spread is across the full spectrum of Australian employment, with the $17.4 billion apportioned across 65 industry funds (Including REST, HESTA and CBUS), 39 corporate fund managers, 154 retail funds and over 426,000 self-managed super funds.
These numbers can seem out of reach and hard to grasp, so it helps to reduce the problem to individual terms. To retire on what the Australian Super resource website deems a “modest” income, would require a couple to have access to $32,511 annually. This would provide for the essentials but not much else. The group estimates that a “comfortable” retirement, including a weekly dinner out, incidental purchases such as DVD’s and magazines and the occasional short trip away would require an annual sum of $56,236 per couple. To reach these figures financial planners often ground their advice around the magic $1 million mark, which allows for the second scenario, as well as a financial cushion to protect against any sudden unexpected expenses or market downturns.
This all relates to lost super’s in a very real way. Most of us remember the power of compounding interest from high school, but some figures really help to show how important this can be.
Take this example. During his time studying at university Robert has five different jobs, each of which contribute to a compulsory superannuation account on his behalf. Each of the five employers contributes $2000 to his future retirement, a total of $10,000. Meanwhile, his partner Jess was lucky enough to work regularly as a receptionist for the same length of time with one employer, which resulted in the same total amount, $10,000, being contributed to her superannuation savings. If Robert leaves his accounts unclaimed and uncombined, by the time he and Jess are 55 he will have $47,000 in his various accounts, while Jess’ contribution will have grown to $70,000, an advantage of $23,000.
This simple example shows the very real power of consolidating all your super accounts under one “roof” to take advantage of what can happen when all your assets are able to grow together. With the average balance of the lost super account nudging $5000, finding your lost super is an exercise well worth undertaking.
Whether it was from your previous employer or the summer internship you had when you were teenager, a part-time role or full-time job, there is every chance that when you left your previous employment behind you also left behind some super that you are entitled to.
That’s where companies such as Suncorp can help, Suncorp allows you to find lost super by utilizing their trained team of specialists. There is nothing to be lost, but a very substantial gain is possible.
So don’t leave what you’ve earned out there. Get out there and claim it, you’ve earned it, you’re entitled to it, and ultimately, you should have the benefit when you deserve it most.