Three steps to save you thousands
MOST Aussies have a love-hate relationship when it comes to their superannuation.
Love because it's money for when you retire and hate because, let's face it, it's boring and many don't know how it works and can't be bothered dealing with it.
According to comparative site finder.com.au its recent survey of 2,306 Australians revealed that only 42 per cent of Australians know their exact superannuation balance, because they either "didn't know how to check it, or they're not bothered".
Young Australians were below the average with just 37 per cent admitting to knowing their super balance and 11 per cent saying they had checked before but didn't remember the balance of their funds.
Here are three ways to help you sort out your super and slash fees.
Consolidate lost super
Bessie Hassan, money expert at finder.com.au, said most people are surprised to learn they have more than one fund, which means a lot of unnecessary fees.
"This may be from being paid by multiple employers," Ms Hassan said.
"You could save thousands of dollars over the lifetime of your superannuation membership by switching to onewith a high return, so it does pay to do your research.
"This can be done through your MyGov website. Your super fund should also have provisions in place to help you transfer your super across from other funds."
Ms Hassan suggested to regularly check quarterly statements to ensure you're receiving the right contributions and not accidentally paying for unnecessary fees.
Common super fees include admin, investment, switching, performance and insurance fees which are typically represented as either a dollar amount or a percentage.
"Fees will vary depending on the super provider, and the structure of the account, and can creep into hundreds of dollars, or thousands long-term."
"For example, a one-year performance fee could range from 10 to 14 per cent while admin fees are generally around $58 to $91 per year."
Check your level of insurance cover
According to the site, one in four super members don't even know whether they're paying for insurance through their super.
"Check your level of cover. You could be paying for life insurance but might only want to be covered for income protection, which is typically cheaper. This can help you cut costs," Ms Hassan said.
She said that if you're paying for a life insurance policy outside of your super then there's no point paying twice, suggesting to "cancel your cover if that's the case".
"Super members unsure of whether they're insured could be left caught out if it comes time to claim and they find themselves exposed."
Change funds / choose the right fund
While it might sound like a lot of effort, Ms Hassan said research is key to getting you the best return.
"Examine the fee structure of your potential fund. Member and administration fees could be charged as a flat annual rate or calculated as a percentage of your account balance," she said.
"If you aren't sure what the best solution for your situation would be, use a superannuation calculator."
COMMONLY ASKED QUESTIONS:
Can someone please explain what superannuation is and why I should care?
Answers provided by finder.com.au
A: Superannuation is a compulsory policy that helps Aussies save for their twilight years.
It's [super] a tax-effective way to ensure Aussies have enough funds to enjoy their retirement years once they're no longer receiving a regular pay cheque.
How does it work?
A: Your employer will make regular contributions into your fund, equivalent to at least 9.5% of your salary, and you can also make extra contributions. The money is invested by the super fund so account holders can earn a return on their money.
When can I access all this money that has been taken out of my salary?
A: Normally Aussies can't access their super until they hit retirement age. However, there are some government schemes, such as the First Home Super Saver Scheme, which was introduced on July 1 2018 and allows eligible account holders to withdraw their super to go towards a home deposit.
How do I know which funds have the cheapest fees?
A: The easiest way to identify competitive funds is to compare funds side-by-side. You can compare super funds online to get a sense of which ones are low-fee. Keeping an eye on the admin, performance and investment fees is a good way to help narrow down your options. It's important to opt for a low-fund fee to ensure that your super balance isn't depleted by annual account fees as this can greatly add up over time."