Otherwise known as a retirement plan in the US or a pension scheme in the UK and Ireland, your superannuation is like a contract for a fixed sum to be paid to you on a regular basis following your retirement from work. For some, especially those not used to the finance world, superannuation is a thing they would probably rather not deal with until the time comes. However we all know it’s best to resolve administrative matters sooner rather than later to minimize complications and keep organised, especially when it concerns your hard earned money.
If that’s you, it’s time to listen up. Here are five reasons why you should be keeping track of your superannuation now:
It’s an investment
For many people, their superannuation is the largest long-term investment they will ever have. If you don’t keep track of your superannuation, it may well just sit there, growing at a low rate or perhaps even losing value if you’re not careful. With a bit of work, you can keep your super as your biggest investment, whether with personal contributions or perhaps keeping an eye out for occasional government co-contributions.
If you’ve ever changed your name, address, or job, which chances are that you have, you may well have lost track of some of your super. This is especially the case if you’ve ever done part-time or casual work. Because of this, it’s worthwhile to first check with the taxation office about whether you have any lost or unclaimed super. It’s yours after all, so make sure you claim it all back!
Multiple accounts get messy
Since most people will have more than one job in their lifetime, superannuation can get very messy. To be able to keep track of how your superannuation is growing, most financial analysts recommend that you move all of your funds into one account. Then, when you receive your annual superannuation statement, check that things are in order, including your balances, employer’s payments, extra contributions, fees, insurance, and tax. If anything doesn’t look right, speak up immediately.
Paperwork stacks up
As stated already, your superannuation can get very messy if you’re not careful. By law, your super fund must send you regular statements telling you what’s happened to your super. Make sure you file these in a safe place. If you find a mistake later on, you may need to refer back to these statements as evidence. It’s important to check your soft copy files too, since many super funds now send statements via email instead of by post.
Ultimately, it’s worth sorting out your super now, when you are financially able and have the energy, rather than later on, when you may be in a time of financial need or at the point of retirement unsure of how many funds you have. Sure it may be bothersome now, but remember the end goal and also the fact that there are many organisations and programs out there that can assist you!
About the author: Amanda Hooper is a university student and freelance writer who is interested in smart saving and spending. She’s grateful to know that there are many SMSF services to help her when the time comes.