Should you consolidate your super? A plain-English checklist

Having more than one super account might seem harmless. After all, the money is still yours.

But if you've changed jobs over the years, you may have accumulated several accounts without realising it. Each one could have its own fees, investment options and insurance arrangements — and those costs can gradually eat into your retirement savings.

For many Australians, consolidating multiple super accounts into one can make things simpler and potentially reduce unnecessary fees.

But consolidation isn't automatically the right move.

Before you roll everything into one account, there are a few important things to check.

Why do Australians end up with multiple super accounts?

It's surprisingly easy.

You may have changed employers and been paid super into different funds. You may have opened a new account yourself without realising you already had another one. Or you may have lost track of an older account after changing jobs or moving house.

The Australian Taxation Office (ATO) provides online services through myGov that allow you to see your super accounts, including super you may have lost or forgotten about.

Having multiple accounts isn't necessarily a problem. However, each account may charge its own administration or other fees.

Over time, paying fees across several accounts can reduce the amount ultimately available for retirement. The ATO specifically notes that having more than one super account can mean paying multiple fees and charges.

Step 1: Find every super account you have

Before deciding whether to consolidate, find out exactly what you have.

Check your myGov account and contact any funds you don't recognise or haven't contributed to recently.

Create a simple list showing:

• Super fund name
• Account balance
• Investment option
• Annual fees
• Insurance cover
• Any other benefits or features

Don't make the decision based on the balance alone.

An account with a smaller balance could still provide valuable insurance or other benefits that you don't want to lose.

Step 2: Compare the fees

This is one of the biggest reasons people consider consolidation.

If you have three super accounts, you could potentially be paying three sets of administration or other fees.

Combining accounts may reduce duplicated costs, allowing more of your super to remain invested for retirement.

However, don't assume the fund with the largest balance is automatically the best fund to keep.

Compare the total fees and costs, investment options and services offered by each fund.

The ATO's YourSuper comparison tool can also help members compare super products, including fees and performance information.

Step 3: Check your insurance before you move anything

This is the step people most often overlook.

Super funds may offer insurance such as:

• Life insurance
• Total and permanent disability (TPD) cover
• Income protection

If you close an account, you may lose the insurance attached to it.

And getting replacement cover later isn't necessarily straightforward. Your age, health, occupation and other circumstances can affect whether you can obtain cover and how much it costs.

The ATO specifically recommends checking whether you will lose valuable insurance before consolidating your super.

So don't simply think: "I have three accounts. I'll keep the biggest one and close the other two."

Instead ask: "What am I giving up if I close these accounts?"

Step 4: Compare investment options

Your super is invested, so the investment strategy matters.

Different super funds can offer different investment options, fees and levels of exposure to assets such as Australian and international shares, property, fixed interest and cash.

Two funds can have very different investment approaches even if they appear similar on the surface.

Before consolidating, compare the investment option you're currently using with the option available in the fund you're considering keeping.

Consider whether the investment strategy remains appropriate for your timeframe, goals and tolerance for investment risk.

Past performance shouldn't be the only consideration, either.

Step 5: Check for benefits you could lose

Insurance isn't the only thing worth checking.

Some super accounts may have features or benefits that aren't available in another fund.

Depending on the fund and your circumstances, these could include particular investment options, fee arrangements or other member benefits.

Ask the fund directly: "What will I lose if I transfer my entire balance out of this account?"

Getting the answer before making the transfer is much easier than discovering afterwards that something important has disappeared.

Step 6: Understand how consolidation works

Once you've decided which fund is right for you, consolidating super generally involves transferring or rolling over your existing super into your chosen account.

The ATO provides a process for transferring or consolidating super, and members can generally use their online services to locate accounts and transfer super when appropriate.

Importantly, don't withdraw your super into your personal bank account simply because you want to move it between funds.

A super rollover is different from withdrawing super for personal use, and superannuation is subject to strict rules around when it can be accessed.

If you're unsure about the process, your super fund or financial adviser can help you understand the appropriate way to make the transfer.

So, should you consolidate?

For many people, yes — but only after checking the details.

Consolidation can make your super easier to manage and may reduce duplicated fees. It can also make it simpler to keep track of your retirement savings and investment strategy.

But there is no rule saying you must have only one super account.

The right decision depends on what each account offers and what you could lose by closing it.

Your plain-English checklist

Before consolidating, ask:

• ☐ Have I found all of my super accounts?
• ☐ Have I compared the fees and costs?
• ☐ Have I checked my insurance in each fund?
• ☐ Will I lose any valuable insurance if I close an account?
• ☐ Have I compared the investment options?
• ☐ Are there any other benefits attached to an account?
• ☐ Have I checked which fund and investment option best suits my circumstances?
• ☐ Am I transferring the money correctly rather than withdrawing it?

If you've ticked these boxes, you'll be in a much better position to decide whether consolidation makes sense for you.

One account can be simpler — but the right account matters more

Superannuation is designed to help fund your future retirement, so small decisions made along the way can add up over many years.

Consolidating multiple accounts may reduce unnecessary fees and make your super easier to manage. But the goal shouldn't simply be to have fewer accounts.

The goal is to make sure your super is structured in a way that works for you.

If you're unsure whether consolidating your super is appropriate, getting professional advice before transferring your accounts can help you weigh up the potential benefits against what you could lose.