Superannuation can be complicated – but it doesn’t have to be. To help you cut through the clutter we’ve busted four common myths around superannuation.
Myth 1 – “I’ll inherit enough to retire on or could get lucky with my finances later in life.”
Some people do inherit or stumble upon enough to fund their retirement, but the odds are slim if you’re banking on it. Unbelievable inheritance stories make for some great reading, but realistically your chances of those strategies paying off are very unlikely.
Focusing on the financial elements that you can control makes the most sense if you want to set yourself up for a secure retirement, so it’s never too early to get your super working hard for you.
Myth 2 – “I can’t access my super until I retire, so it’s not much use thinking about it now”
Just like studying, preparation at the start and ongoing dedication to your super will put you in the best position possible. Cramming right before your exam (or retirement) is never going to be the best solution if you want a viable outcome. Focus on the things you can control now before it’s too late, because doing so could make a big difference later on.
Things you should consider include:
- Paying just one lot of super admin fees. If you’ve got more than one super fund account you’re probably paying more in fees than you need to. If you consolidate into one super account you will almost certainly save money, and the sooner you do it the more money you’ll save over time; and
- Putting more in – over and above what your employer contributes for you – even if it’s just a little, it will compound over time.
Myth 3 – “Spreading my super across a couple of different funds is a good thing – like not having all my eggs in the one basket”
See Myth 2 about paying more than one set of super fees. Consolidating super is a crucial step if you want to maximise your investment and enjoy the benefits of fewer fees, more control over your insurance cover, and less paperwork.
Don’t feel guilty that you’ve never gotten around to consolidating your various super accounts – you’re not alone. The Government estimates there are around 33 million superannuation accounts in Australia – about three accounts for every worker.1 That’s one reason they’re making it easier to bring your super together with Stronger Super reforms like SuperStream. Visit http://strongersuper.treasury.gov.au for more information or find some consolidation help like our Super Concierge Service.
Myth 4 – “I’ve lost super investments forever because I can’t remember what super funds I’m with.”
The Australian Taxation Office estimates Australians currently have more than $17 billion in lost/unclaimed super money.2 That’s “billions”, not millions. But the good news is you can get it back. Check the Australian Taxation Office’s (ATO) free SuperSeeker tracing service or ask your current super provider for help.
Need more superannuation information? Check out our online hub here.