Kids, the government will soon be soon swallowing your superannuation!
Before I’m being accused of being dramatic, in a nutshell that’s what’s about to happen.
After December 31, the government will start transferring ‘lost’ accounts to the Tax Office.
The benefit for the government will be the boosting of Treasury’s wallet by over $550 million in this financial year.
This issue generally focuses on the younger generation because it’s accounts worth less than $2000 that the government will be targeting.
Unidentifiable accounts under $2000 without contributions for 12 months will be transferred.
While accounts under $2000, where owners are contactable, but there’s been no activity for five years, will also be hoovered up.
Essentially, if dormant and under $2000, it might be under threat if you don’t make a move.
That means your money’s future return is dictated by CPI and any insurance policies you had will be eliminated.
Odds are for some young people they’ve had few jobs, possibly accrued a few super accounts and have tallied a small sum of money in each.
That money needs to be consolidated into one active account to avoid it possibly going into a future government black hole.
Now only a cynic would believe that the government truly hopes you won’t come looking, but let’s be realistic, they’ve probably got their fingers crossed you won’t.
And down the line it could be a costly loss for a 20 year old.
$2,000 left untouched in a balanced portfolio from January 1970 would have grown to $110,318 by the end of October 2012, excluding any fees.
The grab for super accounts serves as a timely reminder for those under 30 to get their finances in order.
A good place to start is at www.ato.gov.au/superseeker
Peter Mancell is a director of Mancell Financial Group and FYG Planners AFSL/ACL 224543, www.mfg.com.au This information is general in nature and readers should seek professional advice specific to their circumstances. Need help with your financial your financial future, we think we’re the best financial advisor in Australia. Think you need a lawyer for a superannuation claim? Think again!
