Around one in ten Australians regularly buy a lottery ticket even though the odds of winning a major prize are about 1 in 45 million.
A much better bet if you want some extra cash is tracking down lost super. According to Westpac’s recent ‘Lost Super’ report, almost one in two of us with super could have a stake in the nation’s $18.1 billion pool of unclaimed superannuation savings.
Superannuation savings are generally classified as unclaimed when the fund has lost contact with the account holder. This can typically happen if you’ve moved, changed jobs or changed your name.
The average balance across all lost super accounts is $2,592. The irony here is that we tend to get excited about finding a forgotten $100 note in the car glove box, yet almost two out of five Australians are unaware of the existence of unclaimed super savings, which could be worth thousands of dollars.
Checking if you have any lost super is easy. The Tax Office website (www.ato.gov.au) features a ‘Super Seeker’ database and you only need to enter details of your name and tax file number. It’s a free service, so it costs nothing to be reunited with any overlooked super.
If it turns out there are lost super savings in your name, be aware you won’t normally be able to access the money straight away. Super is money set aside for retirement, and in most circumstances it can only be accessed once we reach ‘preservation age’ – between 55 and 60 depending on when you were born.
The fact that we can’t dip into our super until later in life is no reason to shrug it off. It’s still your money, and tracking down any lost super is worth the effort.
Let’s say for instance that a 40-year old discovers unclaimed super savings of $3,000. If we assume this sum earns the average annual return of 7% achieved by balanced funds over the last ten years, by the time our hypothetical worker retires in his or her mid-60s, the $3,000 will have added about an extra $12,000 to the overall balance of retirement savings. That’s money for an overseas trip, perhaps a second car or some home improvements.
Reclaiming lost super does involve some paperwork, and it makes sense to roll any reclaimed balances into your main super fund. This means you’re not paying multiple sets of fees and it’s a simple way to keep track of your nest egg all the way through to retirement.
Most funds provide the necessary rollover forms on their website, or if you have queries simply pick up the phone and ask for assistance in completing a rollover. It’s a minor investment of your time that can make a valuable difference to the quality of your retirement.