Regardless of your current age, retirement is something you want to start preparing for as soon as you can. So, what’s your super plan like so far?
[ctt template=”7″ link=”EF5df” via=”no” ]Having multiple super accounts can impact your wealth. Those impacts are noticeable in your superannuation statement.[/ctt]
Having multiple super accounts can impact your overall wealth in a number of ways. Those impacts are noticeable in your superannuation statement. You win some (from contributions)… and then you lose some (administration fees).
Is having multiple super accounts a good idea for your wealth?
Let’s take a look at a few implications keeping multiple superannuation accounts can have on your revenue.
Holding your superannuation in multiple funds can involve paying duplicate sets of costs which can significantly reduce your wealth in the long run.
The ATO (Australian Taxation Office) reported on 30 June 2016 that over 14.8 million Australians have a superannuation account. Almost half of these people currently hold their superannuation in more than one fund. Many of them are nearing retirement (61-65 years).
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2. Asset allocation
Asset allocation indicates how your super money is invested into different funds. When you understand how your investments are being distributed you will be able to identify how they serve to accomplish your financial goals.
How does your super account influence your asset allocation?
Within most super funds, you can choose where your super money is invested. The amount of choice you have will depend on what super fund you are using. The majority will offer their own investment options and may allow you to invest through managed funds. The most common alternative is the “default investment option”. This equates to approximately 70% growth assets (shares and property) and 30% income assets (cash and fixed interest).
If the default investment option does not align with your needs it may indicate that you are not getting an optimal result from your superannuation.
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When is holding multiple super accounts a good idea?
There are a few situations when retaining multiple superannuation accounts can be a good idea. For example, you may find yourself in a situation where:
- one superannuation account needs to be kept with the minimal account balance because you have personal insurance cover it that was established prior to a medical condition developing;
- the other superannuation account is receiving your personal and employer contributions due to its potentially better quality investments.
Whatever your current situation, it is important to understand all the options that are available for you.
The Wealth Management specialists here at Shuriken Consulting can assist you in deciding on the best options for your retirement plan. Get in touch with one of our specialists now.