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Lost super is lost money for young Australians

A report has found a large amount of the younger generation have lost superannuation accounts.

More than 60 per cent of Australians under the age of 40 may have lost or forgotten about money in super funds.  This figure is much higher than for those aged between 40 and 59 who are more likely to keep track of their super.

According to the report 54.5 per cent of those with lost super found the process to recover their money too difficult and/or time consuming. This could be due to an attitude of complacency amongst the young towards super.

Figures released by the Government announced recently that overall Australians are getting the message about super.  The figures show a 14 per cent fall to $17.4 billion from the previously reported total of $20.2 billion.

Lost member accounts have also recently improved, from 5 million to 3.6 million – a reduction of 28 per cent.

It is not just young people who are losing super accounts though, the report also found that 39.3 per cent of respondents under the age of 50 might not know if they had any unclaimed super.  This same group had no plans to chase up their lost super either.

While most younger Australians are probably not thinking about making plans for their retirement yet, experts advise that super will probably be the second biggest investment these young people will have.

Rolling all funds together now may make a big impact on their super investments down the track, and may mean a significant difference to their quality of life in the future.”

The report confirmed that there many lack enthusiasm for their retirement planning across all generation, and underlined the fact that most people underestimate how much super they will need to continue to live comfortable after retirement.

There are many avenues that will help individuals track down their lost super, and roll it into one fund, or even create a SMSF, which can be very beneficial, especially for investors or trustees.

Posted on 28 August '12 by , under Business.

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Transition to retirement

The transition to retirement (TTR) strategy allows you to access some of your super while you continue to work.

You are able to use the TTR strategy if you are aged 55 to 60. You can use it to supplement your income if you reduce your work hours or boost your super and save on tax while you keep working full time.

  • Starting a TTR pension: To start your TTR pension, transfer some of your super to an account-based pension. You have to keep some money in your super account so that you can continue to receive your employer's compulsory contributions as well as any voluntary contributions you may be making.
  • Government benefits and TTR: The benefits you or your partner receive might be impacted if you choose to opt for this strategy. How and what exactly will change might become clearer upon discussing this with a Financial Information Service (FIS) officer.
  • Life insurance and TTR: In some cases, the life insurance cover you have with your super may stop or reduce if you start a TTR pension – check this before making any decisions or changes.

TTR can help ease your mind as you transition into retirement but it can be a bit complex. Before you choose whether you want to use TTR to reduce work hours or save on tax, or even if you want to use TTR altogether, you should figure out how this will impact all aspects of your finances.

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