The clouds are milling, the temperature has plummeted, and the first half of the year disappeared without you even noticing it. You look back at all the goals you recklessly shouted to the world on NYE (damn it – will we ever learn?) and it’s easy to feel a bit down.
And let’s face it, after the excitement of the EOFY sales wear off and you get sucker punched with an adrenaline withdrawal accompanied by credit card dread, it can be hard to get excited as the first weeks of July slink away.
Confession – we still haven’t started on our tax prep. But we’re not worried cos we got our ducks lined up when we shared the Ultimate Checklist to Slay Tax Time. And we’re not gloomy because we’ve got the inside track on how to turn that financial frown upside down.
Get ready, cos we’ll show you why you should be getting out the streamers, just like us, and shouting “Happy New Financial Year!”
Warning – yes, we will be banging on about retirement planning. But we promise to show you why this is the perfect time to get up close and personal with the latest superannuation changes and make them work hard for you
#1. Why you need to care about your super
In Australia, superannuation is one of the most tax-effective structures we have. Why? It’s designed to help us save for our own retirement. We get it, most people hear the word super and – even worse, retirement – and turn off faster than a bucket of prawns left out on a hot summer day. But super doesn’t need to be snoozy. And it’s your money so listen up. Forget saving for blue rinses, lawn bowls and bingo. This info will get you set for a retirement you’ll love dreaming about.
#2 Your employer is going to put out for you
It’s the beginning of the new financial year and you may have noticed a little change in your pay. Hooray! 🥳
As of 1 July 2023, the latest increase in the superannuation guarantee (SGC) kicked in. That’s the amount employers are legally required to pay into your superannuation account if you’re a full-time, part-time or casual employee. This year, it’s increased from 10.5% to 11%. It really is a gift that keeps on giving as the SGC will keep increasing by 0.5% each year, at least until 2025 when it hits 12%. That’s a juicy top up in spending money for your retirement. High five.
#3 The low down on what this means for you
You know how you feel when there’s a gorgeous dress you’re gagging to fit into for a special night out? The tiny daily sacrifices often don’t feel like they’re going to get you zipped up in time. But lo and behold, if you stay the course, the grams add up to kilograms and voila! Out to dinner wishing you’d worn something with some wiggle room so you could eat more, but feeling mighty fine with your goal smashed.
You got us? Or no idea what we’re talking about? Okay. Straight talk: just an extra 0.5% more every month may not feel like a lot, but little changes add up. And in the case of super which compounds every day your cash is invested, it makes a big impact long term. So, this is exciting stuff to super nerds like us. And we’re here to make it easier for you to get excited too.
#4 Fierce facts and super numbers
The legislated increases in the SGC are designed to make sure we’re saving for our retirement, and a comfy retirement at that. Without superannuation, we’ll be working a lot longer than we want to, or we’ll be reliant on the government age pension. Now, we don’t know about you, but $971.50* per fortnight isn’t going to cut it to fund the retirement the folks at Super Fierce are dreaming about!
Okay – who pays the extra 0.5%?
As we say a lot in finance… it depends! If your salary is inclusive of super as a total package, you’re likely to notice a little reduction in your take-home pay because of the extra going into super. That’s a win for Future You, but you may feel that squeeze right now with the cost of living going through the roof.
If your income is based on a salary or hourly rate, plus super, that extra amount will come out of your employer’s pocket. 🥳
Is 12% of your salary going into super (by 2025) going to fund a retirement you’ll love?
The Association of Superannuation Funds of Australia (ASFA) releases data on what they believe should meet the average Aussies’ retirement needs. Currently, this data suggests couples should have $640,000 at retirement and a single person needs to retire with $540,000 for a comfortable retirement. We’re afraid that assumes you will own your home.
At Super Fierce we think the ASFA definition of comfortable is… well, really not comfy at all. Not for most people we speak to.
For example, “Comfortable” is better than “Modest”, but only allows for
/ One international holiday every 7 years… yeesh!
/ $117 per month for clothes… ahem?
And we believe you should be able to choose for yourself! So we’ve crunched the numbers and created a range of retirement goals which we think are more realistic, and give you the choice you deserve. We extended ASFA’s research to estimate the costs of living for two additional levels: Stylin’ and Gangsta.
Want to read more about what these lifestyle standards include? Click here.
#5 Follow these steps to get cashed up for retirement on your terms
Retirement is about living your best life, whether that means being comfortable, stylish, or even gangsta! We want you to ride off into your sunset years cashed up and livin’ it up. That’s why we’ve created a FREE retirement planner to help you achieve your goals.
You can revisit your fierce retirement planner as many times as you want and play with your Stylin’ and Gangsta goals. Our calculator does all the nerdy work so you can see how much you need and how far away you are from the lifestyle you’re dreaming of.
Ready? There’s no better time than the new financial year. Start planning now for the future you deserve!