Find your lost super
IF you're worried about having insufficient super to fund a decent retirement, a good starting point is to catch up with any 'lost' super.
The latest Westpac ASFA Retirement Standard shows that a couple currently needs a combined annual income of around $52,000 to fund a 'comfortable' retirement. Even a 'modest' retirement demands household income of about $28,000 annually.
And if you're planning to rely on the Age Pension to support you in old age, think again. At best the pension is worth about $26,000 annually for a couple - insufficient for even a modest retirement.
If you're hoping to lead a decent retirement lifestyle, I recommend embracing your super. Yes, the government continually tweaks the rules, and yes, your fund balance can be subject to the short term highs and lows of investment markets. But superannuation remains the most tax-friendly way to build a retirement nest egg.
The trouble is, plenty of Australians simply lose touch with their super over the course of a working life.
Despite public awareness campaigns in 2009, figures from the Tax Office show the volume of super recorded on the 'Lost Members Register' is rising - not falling. There's currently close to $13 billion worth of super that can't be traced to its rightful owners.
The ongoing growth in lost super can be partly attributed to the rise of casual labour. If you earn over $450 in a month, your employer is obliged to make super contributions on your behalf. Unless you nominate a super fund of your own, these contributions may be paid into a fund chosen by your boss. If you move on to a different job, as many casual or part-time workers do, your fund balance will remain in place, growing through annual investment returns but also being eroded by ongoing fund fees.
There are a few options available to track down any lost super. You can contact your existing super fund if you have one, and ask them to search on your behalf. Or you can use the Tax Office Super Seeker service. To access the service, call 132 865 and follow the prompts, or search online at www.ato.gov.au/super. You can also complete a "Searching for lost super form" and send it in by mail. The form is available by calling 1300 720 092.
To complete a lost super search with the Tax Office, all you'll need is your Tax File Number. The service doesn't cost a cent, so be wary of any other lost super' services that charge a fee to reconnect you with old super balances.
If Super Seeker finds a match it will give you the name and contact details of the super fund. From here it's up to you to get in touch with the fund and discuss your options. You may want to just update your details and keep the super account active, or a better idea may be to consolidate the money into your current super fund.
If the balance of your lost super account is less than $200 you may be able to take it out tax-free. Contact the super fund for more information.
Paul Clitheroe is a founding director of financial planning firm ipac, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine.