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If you have had different jobs with different employers over your working career you will probably have superannuation accounts in many different funds. Apart from the time it takes to keep track of these accounts, there are three more serious concerns of which you should be aware.
Choosing the right investments for your situation is critical to maximising your retirement nest egg. Super is for the long term and just 1% extra in returns every year can make a significant difference. For example, if you were earning $70,000 per annum and your fund was receiving only the 9.5%pa superannuation guarantee contributions, you could have $288,000 after 20 years if the fund consistently earned 7%pa. If it earned just 1%pa more, you could have $326,000 , over $38,000 more!
Reports and Fees
More than one fund means you receive multiple annual reports and statements either by post or to your inbox. Apart from being a nuisance, the big danger is that your super will be eroded by fees.
An inactive account is one that has not been accessed or contributed to in the past 12 months and the super fund cannot locate the account owner. Superannuation held in inactive accounts with balances less than $6,000 is transferred into the federal government’s consolidated revenue account. As there are billions of dollars held in inactive accounts, this is a huge windfall for the government, but does any of this money belong to you?
You can easily find out if you have any lost super by using your MyGov account and linking to the ATO. If there is lost super showing, follow the instructions on the MyGov service to claim it. If you don’t have a MyGov account you can download a form from www.ato.gov.au and submit it to instigate a search. Or you can use any of the private services available to locate your super.
When preparing to consolidate your super funds, make sure you look at any insurance that might be included in these funds. Don’t leave yourself vulnerable without sufficient cover. Talk to an AGS Financial Planner about this before you close any accounts.
zero initial investment, $6,650 pa regular contribution over 20 years [a flat 9.5% of $70k as SG], with a 7% rate of return;
Same assumptions except 8% pa rate of return.
All calculations do not take into account inflation, tax or fees/charges.
AGS Financial Group Pty Ltd, ABN 70 093 990 946, trading as AGS Financial Group, are authorised representatives of AMP Financial Planning Pty Limited ABN 89 051 208 327 (Australian Financial Services Licence No. 232706). Any advice on this page is general in nature and does not take into account your personal objectives, financial situation or needs. Accordingly, you should consider the product disclosure statement for any product and your own objectives, financial situation and needs before acting on this information and before acquiring a financial product. You can obtain a copy by contacting us on 02 9966 8188.
Financial planning, corporate benefits and mortgage services are provided by AGS Financial Group Pty Ltd ABN 70 093 990 946, an Authorised Representative of AMP Financial Planning Pty Limited ABN 89 051 208 327 (AMPFP), AFS Licence No 232706. Accounting, taxation, and business advisory services are provided by AGS Accounting Pty Ltd ABN 12 166 728 696. Liability limited by a scheme approved under Professional Standards Legislation.