See the long-term effect multiple fees can have on your final super balance
Patrick
For years, Patrick thought paying $5 a month in super admin fees on four accounts – or $20 – wasn’t worth worrying about. Consolidating his super into one account when all he’d be saving was the same as about four cups of coffee a month seemed unnecessary.
Audrey
Audrey kept to one super fund and paid $5 a month in admin fees in total.
Ten years on, the difference Patrick’s multiple admin fees made to his final balance is very clear.
10 years ago |
Patrick
|
Audrey |
|---|---|---|
| Funds | 4 | 1 |
Super balance Fees^ |
$180,689 $480 |
$180,689 $160 |
^ Annual administration and insurance fees
Today |
||
|---|---|---|
| Super balance before fees | $323,258 | $323,258 |
Fees (Incl. lost compound earning) Final balance |
$32,652 $290,606 |
$24,662 $298,596 |
Audrey’s final balance is $7,990 more than Patrick
Before you consolidate your super
Before you consider consolidating your super, weigh up the benefits and features of your other super funds against your chosen super account and compare the fees of your fund(s). Don’t forget your insurance and make sure that your chosen super will provide you with the appropriate cover to replace any cancellation of insurance cover that will occur by consolidating your account(s). In addition, if you made personal contributions and intend to claim a tax deduction, ensure the 'Notice of intent to claim or vary a deduction for personal super contributions' is received and actioned by the existing super fund before you consolidate your accounts.
We also have a few handy tools
Retirement forecaster
Budget calculator
Small change, big savings
What next?
Contribute to your spouse's super
BExplore how contributing to your spouse's super could benefit you both.
Catch up on your super
Explore how you can catch up and boost your retirement savings.
Important information
The examples above are for illustrative purposes only and are not an estimate or guarantee of your account. Neither Audrey nor Patrick is an actual customer of Plum.
- A few things to think about before you consolidate your super:
- Weigh up the benefits and features of your other super funds against your chosen super account.
- Compare the fees of your fund(s).
- Don’t forget your insurance and make sure that your chosen super account will provide you with the appropriate cover to replace any cancellation of insurance cover that may occur by consolidating your account(s). Appropriate insurance can include level and types of cover as well as policy terms and cost.
- Check the tax implications and see if your tax and preservation components will be affected. Speak to your financial adviser for further information.
If you intend to claim a tax deduction for certain personal contributions made into your other fund, ensure your ‘Notice of intent to claim a deduction for personal contributions’ is made and is acknowledged by that fund before consolidation occurs. For more information, visit ato.gov.au.
The example assumes both Audrey and Patrick’s current age is 55 and they’ll retire at 65. It’s assumed that both Audrey and Patrick’s income is $80,000 and the starting balance for Audrey and Patrick is $180,689. Audrey has one account with the full balance of $180,689 and Patrick has four super accounts with a balance of $45,172.25 per account. Their super guarantee (SG) is 9.5%. It’s assumed that Patrick has one super account with 100% SG contributions, while the other three super funds have zero SG contributions. Neither Audrey nor Patrick is currently making any additional contributions to their super account. Their administration cost is $60 per year and their indirect cost ratio is 0.45% and has a balance investment option. Their investment return is 4.8%. Investment fee is 0.5%. CPI inflation is 2.0% each year.
