By Powerbuy // 13 March 2014 // Related Categories: Tips
Your Superannuation is an important asset for you, it is your money and it is there to create an income stream for you in retirement. If you have ever thought about changing superannuation funds then there are 6 key things to consider so you do not risk any of your hard earned money.
1. Check existing employer benefits will accept the change
Do you have existing employer benefits, for example, is your employer putting in extra superannuation contributions for you as part of your salary? Or are you currently salary sacrificing extra superannuation contributions?
If you do, you should check if any change you make will affect these benefits. Ask your employer and the super fund if they will accept any change to the arrangements you already have in place.
2. Check you don’t lose out on insurance entitlements
Employer default superannuation funds can have automatic acceptance levels for insurance cover. It is important to maintain any insurance cover you may have and to ask the new super fund about this. Super funds most commonly hold Life and Total and Permanent Disability insurance. Find out about:
- what options are available
- the requirements to be eligible for insurance cover
- the premiums payable
- what level of cover is suitable for you
3. Check how long it will take and any fees
Super funds can often take some time to release your superannuation monies and then rollover these funds into your new superannuation fund. Exiting, changing or rolling over your money may attract fees so be aware of the impact to your superannuation balance.
4. Check if you have any lost super
Take advantage of the change and search the Australian Taxation Office website SuperSeeker tool to see if you may have other superannuation fund account balances that you may have lost track of. You may be able to access this money and put it into your new superannuation fund.
5. Consolidate rolling multiple accounts into one superannuation fund
Something else to consider and take advantage of is consolidating all of your superannuation fund accounts into one new fund. This has the benefits of:
- Reducing fees, as each superannuation fund account you have has administration fees taken out of your superannuation balance.
- Reducing insurance premiums paid. Again, each superannuation fund account you have has insurance premiums paid out of your superannuation balance reducing your money pool and you may even find you are over insured, so it’s a good time to evaluate.
6. Rethink your investment options
This is one of the most important items to consider. It is where your superannuation monies are invested that will ultimately provide the income and capital growth you require to maintain your income stream for retirement. The decision can depend on your age and your retirement options.
Request the performance history of the investment options of the superannuation fund you are considering so you can have some idea of what income and capital returns you can expect.
Take advantage of any financial planning advice the superannuation fund can offer to ensure that what they are offering suits your needs. Not all superannuation funds are for everyone and this is why you have choice.
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