One in four Australians say they don’t have a retirement pension fund but often just don’t know where they are, a new study finds.
People who really don’t have funds can include Baby Boomers who retired before the superannuation was created, but have super self-directed funds.
In the video above, the retirement benchmarks for a comfortable retirement
Or they may not have a job or are low-income people earning less than $ 450 per month who, until very recently, were not eligible for mandatory superpayments from their employers.
But sometimes Australians who think they don’t have a super account actually do – often more than one, says Alison Banney, Finder’s pensions expert.
“The most likely explanation is that a number of people have a super fund, or even several, open in their name that they don’t know or have forgotten,” Banney told AAP.
Finder’s survey of 1,007 Australians found that 24% – or roughly 4.6 million people – said they had no funds.
Of those surveyed who said they had done so, 17% were unaware of their risk profile.
Banney says it’s alarming that people don’t know their financial future better.
Recent figures from the Australian Bureau of Statistics suggest that half of Australian retirees still depend on the government age pension as their main source of income.
COVID reaches retirement pension
Meanwhile, the COVID pandemic has forced people to dip into their funds, with more than three million Australians withdrawing a total of $ 37.8 billion between April and December 2020, according to the Australian Tax Office.
“Whether Australians never had a Super, accessed them during the first COVID outbreak, or lost track of their accounts, all of that makes fewer people protected than the system would have hoped for,” said Mrs. Banney.
“The retirement pension is a fundamental right for working people.
“That’s why it’s so important to check. “
People should go to their myGov account, which is linked to the ATO, to verify their super accounts and consider consolidating or switching accounts to avoid paying multiple account fees, Banney says.
And at the very least, know where their hard-earned money is.
Strategies for increasing retirement pension balances
One of the easiest steps to maximize the Super is to consolidate multiple accounts, although after November 1 most employers will need to place Super Guarantee payments into the employee’s existing account. Check the insurance before consolidating.
2. FIND SUPER
Look for super “lost” accounts, which are accounts that were transferred to the Australian Taxation Office after being found to be inactive and had a low balance.
In addition to receiving contributions from employers, individuals can increase their super by sacrificing their salary or by arranging with employers to pay a certain salary / wages into super funds. These payments are taxed at a maximum rate of 15 percent, which is often lower than the marginal tax rate.
Individuals can also add their own contributions to their super fund using take-home pay and then claim an income tax deduction. These types of contributions are capped at $ 27,500.
The government also pays a super co-contribution for low- and middle-income earners of up to $ 500. This is automatically paid to super funds when they are eligible.
Individuals might also be able to make a contribution on behalf of spouses who are not working or who are classified as low income and claim a tax deduction of up to $ 540.
Advice from Dr Camille Schmidt for the YourLifeChoices Retirement Affordability Index