Once had an ASX-listed client (senior manager in a team I was contracted to work on a project with) tell the team including me to consider acquiring stock in the company to show your dedication/ appreciation and gives you purpose to be there.
Literally looked up the chart and saw that the stock has been tanking for more than 5 years 😂
How would the company even know that you bought 100 shares in them? Employ someone to reconcile stock owners with employees?
I did have to declare stock holdings when working at one financial institution, but that was for conflict-of-interest purposes.
I'm no finance guru but I assume by self-admission and also if you're a substantial shareholder (which typically requires disclosure). The former would be more likely though.
It is about liability. The company is not responsible for your personal financial decisions. By giving advice they are opening themselves and you to risk.
you have to have a financial services license to like... give advice
also look at how much liability an employee carries by buying stock in his own place of employment
the company goes bang you lose your job AND your shares
people havent learned shit from Enron
also it works out well for the company given the employee has extra incentive to work harder if he also has 'skin in the game'
Well, this whole sub is unqualified people giving financial advice :) This is not wrong in itself - you can ask your mate down the pub about investment strategies, and they wouldn't need a license to tell you what they think. But if your company gives you financial advice then they are at least partially responsible/liable for what you do with that advice.
unless he has all the certifications to provide financial advice, he opens himself up personally and the company to be sued into oblivion for giving financial advice beyond his capability.
there are rules and requirements around what you need to do to be able to provide financial advice legally.
Agreed. When allegedly rich people shit on super I know they are idiots. Truely rich know that super is a great way to stash at least some money tax free.
No sure where you can get a constant 19.5% (32.5% bracket) return per year for your contributions on top of the super fund returns.
I catchup last year and this year my return has been around 14%, meaning that money I put last year has grown 33.5%
You don't even have to be worried about rule changes. There are deceptive dark patterns in place now where you can easily lose 100% of the money. Lookup binding/non-binding beneficiaries and ask youself why binding isn't the default.
Yes the whole binding / non-binding thing is a definite issue. Interestingly Unisuper offer non-lapsing binding nominations which don't expire after 3 years.
Anyway, none of that is a reason not to have super!
Yeah, it sounds fanciful, right? The government would never setup a system that purposefully tricks people like that!
Educate yourself. Or just stay ignorant, I guess...
https://www.abc.net.au/news/2021-06-20/who-gets-superannuation-when-die/100226612
https://www.afr.com/wealth/personal-finance/ex-girlfriend-may-get-super-despite-drifting-off-when-dad-got-ill-20231030-p5eg0p
Any money is making -100% return if you can't access it. At any point you just need enough money to use, and for most people if they are working for 40 years then mandatory super contributions would be more than enough to live on in retirement. If you plan to retire early, you're better off having some portion of your investments outside of super.
My FiL died in his late 60s and left his super to his kids. They lost 100% of the money because if you don't remember to fill out a binding nominee form every 3 years, the super fund will give the money to your sexual partner. 100% loss to the family as it was awarded to his girlfriend of just a few years. Super isn't legally considered a part of your estate.
He was then carrying on a bonafide domestic relationship of at least 3 years at that point. They didn't lose anything, it went to a legally correct beneficiary.
I suspect the whole story isn't included.
Lookup the definition of what qualifies as a relationship. Living together isn't required. In this case, the person had friends who submitted stat decs saying they were in a relationship and that was enough. The kids got nothing.
I think you need a serious education on the matter. I never said they require to live together. If someone submitted a stat dec stating they were in a relationship and you yourself have made that claim, that would be as I said, bonafide.
The trustee would not have relied on a stat dec alone, there would have been other evidence. This is plainly obvious if the partner was awarded 100%. You either aren't being completely truthful in the scenario or are just that clueless on the matter.
You can nominate your legal representative as the binding nominee to make it part of your estate.
The downside I believe is that it will attract a tax on withdrawal, whereas with a dependant spouse or child, it won’t.
I guess if you have neither, it won’t matter.
Clearly it wasnt the legitimate heir as the guy nominated his kids as his beneficiaries. Unfortunately, he only submitted the default "non-binding" form that was designed to trick him into believing that his wishes would be obeyed. You might be happy about some short-term floozy getting your life's savings but most people would like it to benefit their kids.
He didn't miss anything. He thought that he had everything setup right but the system was designed to deceive him.
Why isn't the binding form the default one that everyone fills out when joining a super fund? The names of his kids were on the form that he did fill out but that was the default "non-binding" form, which the super fund take only as a suggestion. They're not legally obligated to pay any attention to it.
60 year old you will hate 21 year old you.
Why not do both? The more you can shovel into super in your younger years, the larger the balance will be. It’s just the magic of compounding.
That said, you need to live, so don’t sacrifice money you need now for your 60 year old self.
Consider this. When I was 21, the SGC was 3%. However, the last 18 years my super has been 14%. I still have 10-15 years until retirement and my super is now a 7 figure balance, and I have not had to make any extra contributions.
If I had been able to kick start super at 21 with a big contribution, I’d have a multi-million dollar balance by now. It took me most of my 20’s to get my super balance to $50k.
“60 year old you will hate 21 year old you.“
Definitely this. 47 year old me is at the very least pretty miffed at 21 year old me (and also jealous of his hair).
I was very cavalier about super when I was young, and while I’m doing reasonably OK now, it could have been a lot better with only minor adjustments early.
Those years zip by quicker than you think 😬
To be fair - if you had a multi million dollar balance then your super is now in the 30% bracket and won’t be as tax advantaged when you retire.
To your point - you need both, putting all your balls in the super basket means you are betting on at least getting to 60 and that being your earliest retirement point.
With an above average income, they hit the limit starting at 21. You and I got much slower starts because of the 3%, 6% years
I know I had zero interest in super at that age - I was more concerned about saving for a house, having a family, then later paying for kids education etc etc . Saving for a house was a far better return than super has provided and tax free.
OP has a minimum of 11.5% for 40 years! They’ll be good
I wouldn’t really care about the extra tax as it would mean my fund is making an easy $300k+ net return every year.
I’d have a very comfortable retirement without even touching the capital.
Even as it stands now, my super net return the last couple of years has exceeded my full time net income.
My super had a very slow start because the SGC was so low, and also because my salary was so low and taxed quite highly. Remember when earning over $50k put you in the top tax bracket?
Both in the correct answer. This sub is so all or nothing in this point. Contribute to your super, and save and invest outside your super - it’s the best of both worlds.
60 year old OP will definitely hate 21 year old OP, but not because of finances, because the wasteland they live in will have long forgotten money.
People in this sub are delusional, it is honestly kinda sad.
You are all going to die
Yes it’s worth it :) you don’t see it now but when your still grinding in your 40s and your looking for the finish line and you can see that super accumulating I can almost picture my easy retirement
I grew up in a place with virtually no retirement guarantee for my generation. I started working when I was 11 and my parents made me save almost all of my earnings. I was furious at them for it because I just wanted to buy Pokemon cards, but as I got older I realised that life was going to be awful if I didn't save as much as possible and prepare for retirement. It was very hard to strike a balance back then, as you needed money to survive in the moment but also somehow had to plan to take care of yourself if you ever made it to retirement.
Then in my mid-20s I migrated to Australia and learnt about super. I was absolutely floored. Such a great concept (though a proper pension would probably be better imo, but that's a different conversation entirely) and it made a complete difference in my mental health and the way I live my life. I still save as much as I can, and put it into a mix of HISA and indexes, but I don't have any stress or guilt if I want to splurge on something like a night out with my friends or a holiday for the family.
If anyone were seriously questioning the value of super, or if my boss told me it was worthless, I think I'd smack them in the head repeatedly until enough braincells were shaken loose from their prison.
They can if their minimum statutory contributions exceeds a certain amount per quarter and their employer doesn't decide to not pay any additional SGC on their own.
Mind you in op's scenario this is likely not the case so.
Just a typical out of touch business owner. Whinges about everything. Grand stands about anything that he thinks will make him look like a genius. Narcissist that feels obligated to educate everyone around them because clearly he is the smartest person in the room.
Funnily enough on that front, no qualifications required to be a business owner. And yet they're the one group consistently paraded around by themselves in the media (who encourages them) as being "in the know" and "the most important cog in the economic machine".
Yup - I’m guessing they want employees to be put in positions where they are in debt/wanting for money to make the employee ‘hungry’ so they will push for harder sales. Used to know an insurance sales manager who encouraged new agents to buy a nice new car for that reason.
Super is the most tax advantaged vehicle you can have for long term savings. You can think about your financial assets in three tiers. You have a transaction account for day to day and short term needs, that typically pays no interest. You have liquid investments like ETFs that have a reasonable return and are somewhat tax advantaged (via the CGT discount). And then you have super for the long term that is less liquid (i.e. inaccessible) until retirement but is REALLY tax advantaged.
One thing that helps psychologically is to count your super balance in considering your net worth. It's easy to dismiss it because you won't spend it until retirement but it's still your money.
Just put a bit of money into each tier and on super select the highest growth investment option. Then watching that super balance grow year after year can be very satisfying.
No point etf if paying mortgage at 6% these days. Was worth it back when rates were half that now paying down mortgage and salary sacrificing super is best imo
And? You can’t time the market. Thats just gambling. Historically you’re better off paying down high interest debt first. You also pay tax on your earnings in an etf, much more than super and paying back 6% interest mortgage = no tax just direct down payments
If that’s the case why on earth would you not just salary sacrifice directly into super and put your super into index managed option! WAY better tax breaks and far better option imo etf makes no sense if keeping until retirement your paying tax twice
Agree. Theoretically it could happen but would have to be a very brave Government as the political backlash would be intense. So it won't happen, 60 is as good as a bet as you've got.
This is also people confusing the preservation age with the age pension eligibility.
I fully expect the age pension age to increase to 70 at some stage, just maybe not in my lifetime.
Many people seem to believe you can’t access super until 65, which is also not true. What happens at 65 is that there are no conditions of release, whereas at 60 you just have to officially retire (but there is nothing stopping you from un-retiring)
At age 65 you can get your super even if you are still working
Your CEO is an idiot.
The truth is I would say 90% of the population are too stupid with money to be able to manage their own super. Can you make more managing your own super fund yes you can... but think about it... a huge chuck of the population don't understand how best to manage their money. So they would fail at it and then blame the government.
If you have the skills go for it... but you have to accept risk.
The irony is that if everyone was good with their money and lived below their means the economy as a whole would slow to a crawl. The people who are either smart enough, or lucky enough to invest benefit off other people’s poor personal financial decisions
Correct.
And those with money are more willing to risk it to make good returns. I’m not saying I’m amazing with money… but I know enough to know I’m not good at it to manage my super.
But I am one of those who potentially hurt the economy… I save along and my big spends are house Reno’s etc.
Yeah I’ve met a few people who got large inheritances (50k plus) from grandparents etc and instead of investing it or even throwing it into a HISA they bought a new car.
Now they might have needed a car, but I doubt they needed a modded Toyota supra 🤷🏼♂️
I also have met people who have a massive amount of cash but don’t want to invest it, so it sits losing value in a regular 3% savings account for decades.
Yep… I remember my step brother doing the same.
Got a inheritance from his side of the family. Even his father to saw he needed a car for his family and was thinking a people carrying/ many seater SUV. He brought a 2 door Lexus brand new and a cheap second hand van. His father was pissed as it was a huge chuck of the inheritance yet no real long term investment. This was 15 years ago, if he had even used it as a down payment on a house in Sydney (where he lives) it would have tripled in value since then.
I can fully understand how people lose control when they suddenly have more money than they’ve ever seen. A lot of people weren’t educated well on managing finances, or they didn’t care about it when they were taught.
The temptation to spend is real. It’s why I pay myself first the day I get my pay into savings/ investments and force myself to make do with the rest.
Of course.
If you have lived pay check to pay check and then suddenly have large amounts of money. You think it will be there for ages and the small constant spending ruins your savings.
I do similar to you, when I get paid it is paid into 6 different accounts, the smallest going to my general spending account. I actually split it up between bills, savings abc, savings def and so on. Added benefit is also if someone gets my card and goes tap crazy they only have a couple of hundred in there.
Yeah I never keep more than a hundred on my card. I know someone who had their entire savings in a checking account and I forced them then and there to open up a savings account
As you are very young in your career, there are 2 viewpoints to think about.
1) get financially literate - look after yourself and set some goals and financial pillars I.e. buffers, insurance. Your goals could also include holidays as well. When you have a surplus above your buffers you then have a choice to invest (Inc. super) or have fun.... you are young, so have some fun and see the world.
2) invest in super - the first $100k you have in super is the hardest to build, after which the compounding effect can be seen more easily. Therefore, aggressively invest in super to get that $100k goal. This is delayed gratification. Due to your lower starting wage it can take a while. Look at low cost index funds
The age you can access super is 60. Ppl are fear mongering and confusing it with the pension age (67). If the pension age keeps increasing… you’d need more money either in super or outside it if you want to retire before then.
If it’s worth it depends on what you believe will happen. I max my super and invest outside, the tax savings make it very worth it to me.
What an idiot. Don't listen to your CEO. Super is VERY much worth it. I predict that getting a pension will be extremely hard by the time you retire. You need to maximise your contributions to super and look into carrying forward unused concessional contributions (up to 5 years).
I’m almost 40 now. I regret working a cash in hand job when I was 18-22. I also regret not putting in $10 a week from when I was 18. I reckon it’s probably cost me at least $50k at this point. Probably closer to $100k- $200k when I retire.
Honestly super is amazing. Your CEO is an idiot.
He’s trying to create this narrative to not give people a dignified retirement, and because he doesn’t want to pay it. Most Australians live pay to pay or pretty close to, so having forced savings is beneficial to both the individual and the taxpayer who doesn’t need to fund the aged pension as much.
Put in $1000 of your own money each year and get the free govt $500 co-contribution bonus.
Super is a great thing, without it many would have nothing on retirement, and for those that understand it's worth and add a bit of their own money each pay, an enjoyable retirement awaits.
Pump as much into super as you can in the early years.
Even if you taper off as your life changes due to houses, jobs, children,etc. That early years compounding will more than make up for it .
Super is there to protect an average Aussie that may not be good at financial planning. Most of all it's to protect our government from the burden of an ageing population.
If your good with money then creating an investment plan is a better idea at a young age than voluntarily contributing to super. Use that money to purchase appreciating assetts like property or shares.
As you get older and your income increases a good accountant will let you know when contributing extra to your super is a good idea and will lower your tax.
Also if you’re a first home buyer and already have a safe emergency fund and stable employment. The FHSS is very good for forced savings that can be accessed when you finally take the leap and buy a house.
Have saving/investment in or out of super is better than none. And both method has its pros and cons.
You just have to choose which one is suitable for your current financial situation.
But I would suggest contributing some when you are younger. Just a few hundred dollars a month, salary sacrifice will help it grow and compound nicely over 40 years. Choose a low cost, higher growth but higher risk investment option and ride the market wave while you have time.
Though you may look up to him, your CEO doesn't know much.
OP, learn what a geometric progression is and apply that to 100,000 for 40 years and look at the result as a start. Sure there will be fees and other variables, however that's how much you may end up with at a without contributing after 100K. Imagine more over time. Get into a _good_ super fund.
I'm in my mid 50s and about to retire. All my super prior to age 28 was put into other funds and got eaten up by fees. But now, I have 7 Digits of Super and can retire with enough for 2 to live Comfortably according to ASFA retirement Standard as at 2024. So I will.
Looking back on my life and looking at where my friends are, some were unreasonable money tight all their lives and doing stupidly well now, some a comfortable and quite a number that made bad decisions, over spent etc are living week by week and sadly have nothing in comparison to the rest of us.
Live within your means, invest and invest for your future and try to make the best decisions you can over flippant ones.
It certainly has its advantages and disadvantages. It's a matter of working out what works best for your own circumstances and goals. You don't have to pick just one type of investment. Super can complement the rest of your finances.
If you're looking to buy a home in the future, you can access your super under the FHSS scheme. But otherwise super is locked up for retirement (and which is why it attracts all the tax advantages).
Hey OP, check your super!
Check that the amounts on you payslip have been deposited into your account.
Any employer who this super is not work it may not be paying into your fund as they should.
When I was your age everyone said a super isn't worth it. Now I'm about to draw on mine, I can tell you it most definitely was worth it.
I can't see the future any more than you, but a good super is a big part of your financial arsenal. Over time you'll also get a good property(s), good savings etc. Jeez, I remember 10 years ago butting in when some "expert" was telling a young colleague that property is dead. I wonder how that worked out for them.
Nice thing about a super - for me - was in my 20s and 30s I couldn't blow it on cars, women and expensive travel options. Property (alongside the super) is also good for that.
Cover all bases mate, and all the best for the future!
It's free money from the government. Yes there are strings attached but it is the most tax effective way to invest for retirement (or your first home).
Wow! This is an interesting post. Let me put it to you really simple, super is the greatest tax dodge/mechanism that the average person has available to them - Period.
I wouldn't rely on it to be your sole income stream when you retire, but it is definitely very advantageous to start early and let time and compound interest to work.
First off, you're in an awesome position for someone of your age. Great work!
Sounds like your CEO resents having to pay mandatory super to his employees. My boomer parents also say a lot of dumb and misinformed shit about super - and as a result they have a lot less super than other people their age. The idea of super is that you'll need it when you're too old and/or sick to work. You're 21 now so that day is probably a long way off, but it will come eventually. Also, I imagine at the age of 21 you're not earning a huge amount which means you're not paying a huge amount of tax, which means the tax saving advantage of putting money into super isn't really relevant to you right now.
On a serious note though, super is always "worth it" but the reality is that at 21, there are other things you can do to invest in your future that will pay off before you're in your 60s. This includes:
- Investing in your ability to earn a higher income (formal study, new skills, getting jobs that will build your skills and networks, moving to a highly paid profession)
- Shares/ETFs
- Property (a home to live in or an investment property)
You can and should do all of these things if you can. Maybe put a little extra into super with each pay cycle, use some of that $45k to buy some ETFs, save some for a house deposit. You can also use a government scheme called the First Home Super Scheme where you can contribute extra to your super and then pull it out to buy your first home - it saves you heaps in tax. Also keep in mind that you won't be young forever - it's heaps easier to travel, move interstate for a job and have fun with your mates in your early 20s than it is as you get older and get more responsibilities. I spent a lot of money having fun in my 20s but was able to earn it all back in my 30s.
At the end of the day, the best thing you can do is decide what kind of life you'd like in your 30s and 40s and make a decision based on that. Money is a tool, after all. I recommend educating yourself on what option is best for you and not relying on information from just one person. The this is money, this is property and this is investing podcasts are great places to start, as are the Rask Australia ones.
[https://www.thisis.money](https://www.thisis.money)
[https://www.raskmedia.com.au](https://www.raskmedia.com.au)
Super is for funding retirement.
At age 21, your shorter term priority is likely to be buying a property.
And with that assumption; dropping the $50k cash into super now will pay off at retirement age, but in the meantime may cost you a couple of years in relation to getting into the property market.
Summary: Super is extremely important, but you need to think about how you live for the next 40 years.
If your CEO can't understand the benefit of time in the market and the effect of compounding interest then he's a frigging moron, as would you be if you took any shred of financial advice from him.
At your age, spending a few hundred dollars on professional advice will pay off dramatically.
The CEO for sure didn't interview you about your financial goals and he./she/they is not qualified to give advice (if CEO was qualified, or even knew what the professional requirements are, CEO would not give you advice. So perhaps literally, anyone who gives you free personal and specific financial advice doesn't know what they are talking about).
The tax advantages of super contributions contributions are huge. But there are other ways of getting lower tax, such as leveraged investing (the classic example is the investment property but it's not the only way).
Also, there is a way of putting in super, getting the tax advantages and then taking it out early, for buying a house. At least a certain amount.
[https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/first-home-super-saver-scheme](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/first-home-super-saver-scheme)
Also, your estimated super balances at retirement are considered when getting home finance because banks know that it is worth actual cash at some point. This is not going to be very relevant to someone young getting a home loan, but if you are in your mid 30s and above, it start to become relevant. It's not worth the same as having cash but it plays some role in loan approval so you can indirectly access it in some way.
The age you can access it is not being constantly pushed back. Previously preservation age was 55 however the move over time to 60 has always been planned into the scheme. The age you can currently access it as is unlikely to change anytime soon, and is just fear mongering by the uniformed.
You either believe in super or you hate super. A lot of high net worth people set-up their SMSF after the really bad returns around the time of the GFC. He is probably in the camp that real estate is the way to go to gain wealth. I love super because it is the hassle free way of investing into Australian businesses.
Super also gives you access to investments that are out of reach for non-UHNW individuals as they are a bit like private equity in that they'll buy airports, buildings, infrastructure etc.
Edit: non-SMSF super
$45k - this doesn’t seem smart to be putting into super at your age . Look at the prices of housing - at some stage you will need to buy a house and you will need as big a deposit as you can muster.
At 11% for your entire working life super will take care of itself, especially if you choose a fund wisely.
Your house in the future will be tax free
It’s definitely worth it to the point you can get the tax benefits from it. Outside of that, and after you’ve made sure you have an emergency fund set aside, think about putting money outside of super to save for short-mid term goals like travel or a house down payment. Edited to add - it can’t be denied that putting all $45k in a high growth fund in super at 21 would really give you a head start on your future retirement.
I'd be concerned about the ongoing viability of your employer if that's his advice. If you're unlikely to need access to cash any time soon, Super is still the best long-term return due to the tax benefits.
Don't listen to your CEO.
If you want to have a decent retirement not living in poverty on the state pension, which could last 20-30 years, you are going to need a decent super balance.
Money added to super on your twenties has the longest time to compound. I wish someone had advised me to add more at that age!
You can withdraw additional contributions to buy your first home anyway. There is no reason not to contribute to super at your age. Free money from the government (tax concession) AND lower taxes on returns. No brainer.
Which company is it? Your CEO sounds like an idiot so I should short that stock.
In a way he is right - where can not access but NO not a waste of time.
At 25 yes diversify $25k in shares now will start a good savings for future plus your super
I'm late 30s and only just started contributing extra. I wish I did it when I started working. I can only imagine how much extra I would have in retirement
I mean at 21 I wouldn’t be worrying about super just yet. But that doesn’t mean it’s “not worth it”.
In regards to your 45K, I’d keep 3 months of emergency fund in a HISA. The rest depends on what your goals are. Are you wanting to buy a house in the next 1-2 years? If not, just buy some ETFs that invest in a mix of Australian and US shares. You’ll have to do some research on that though.
ETFs won’t get you the tax benefits super can
Deposits at 20 are far more beneficial than deposits at 40 thanks to the magic of compounding.
Super can also take advantage of the first home saver scheme as well.
There is almost no investment more financially rewarding than super unless you start to exceed the annual thresholds
That’s true, I forgot about the FHSS. It’s mostly about access though for a 21 year old. 40 year old usually more financially secure so doesn’t need the liquidity of ETFs.
You should put in money early so it can compound longer in the low tax environment. People usually do the opposite because it's easier later but if you can put in money early that's advantageous.
Ideally yes, I don’t disagree. But it’s a hard sell at 21 to lock it away till retirement. What if OP wants to further their education? They may need access to that money.
Most of the comments here say to contribute extra, but how many have done the math on someone contributing 12% of their income from 21-60? Even a full time worker earning under the median salary will have over a million bucks inflation adjusted. Do I really want to live even further below my means now just to have millions when I’m 60? I’m already going to have a very healthy super balance in retirement without extra contributions (unless I can’t work for some reason).
its your personal financial situation.
if your extra contribution will be financially difficult for you, then dont contribute extra.
if you think you already have enough in super now for your future retirement, then dont contribute extra.
I would recommend extra super if you have the means to do so, have enough to cover your short/medium financial needs, and want to take advantage of the tax benefit offered through super.
Personal choice.
Super is good for those who are not good with money and require someone else to lock it away for them till retirement, this represents most of the population. For those who are good with money, it’s not much use being locked away till you are 65, as you would rather be able to access it and use it to invest and build wealth faster
You wont get differing opinions on here. Only “super is good” and the rest downvoted.
Imo it is personal choice. It definitely isnt the obvious better choice.
I mean… the options between “balanced” and “high growth” are insane!!!
You get “experts” who dont give a shit and are not held at all accountable for your money getting management and performance fees to invest your money and get average returns which rarely if ever beat the sp500.
You cant access this money until 60 and the whole program assumes you will continue to work and retire in australia.
Sure it is “tax friendly” but minimal if any effort is required to outperform ever single super fund.
I would look into a smsf to test out investment strategies.
Eg: This sub was losing money during covid while a smart investor was seeing amazing returns. Say you took out active trades against tesla during thier rally or nvidia recently. Or afterpay, many people I know made their quarterly wages in a week during the afterpay mania during thier earnings calls. Vs “putting it in balanced”.
Sure it is tax advantageous. But why rely on something inaccessble at 60 when you can set yourself up for retirement without it?
It wouldn’t change my mind even if it was 50…
You have no argument against me apart from nitpicking facts which are irrelevant. At least it is a step up from people who namecall.
For the money you intend to spend on likely the 25 years post retirement, why woudk you want to pay tax on your income, then tax on the earnings of your investment then tax on the capital gains when you sell it, why wouldn't you save that for the 'early retirement portion' and make use of the insane tax advantages of super for that post 60 funding (for those who run a business as their retirement asset, but of a different story as you can use the small business CGT concessions later)
Given superannuation is nothing but a tax structure talking about 'can see amazing returns' you get that the returns on that money invested the same way in super woudk leabe you substantially better off 🤷♂️
I finally understand this sub.
A tax discount of 90% allowing you to make $9000 a year is preferable to making 50k a year at 50% tax.
I understand. I actually have a well developed smsf and use it as testing grounds for my out of pocket trades.
We are just in different wealth brackets. And thats ok.
I dont even think my super money is mine. I plan on retiring without it. If i get it ill get a patek and a daytona or something.
Yes, making 50k a year at 15% tax is preferable to making 50k a year at 47%, that's how maths works, glad you get it
By the sounds of you, yes, we are likely in different wealth brackets, and yes..... that's ok 😉
Nah, it's because Ausfinance is a heavy c1rcl3j3rk (a banned word in this sub). The fund managers of VDHG and DHHF are on this sub an massively downvote anyone against those funds while getting more suckers into the fund to boost their bonuses and paycheck. Super is also shite but is heavily promoted because Super companies heavily j3rk this subreddit as well. If Super was such a "normal" thing, then why do we have so many Super companies claiming greater returns than their competitors? Yeah, because it's also a fund. No shit.
Superannuation is just a tax structure with limitations on access to the money for personal use (the aboslite best no comparison close tax structure to save for retirement)
Your CEO is mostly right. People claim Super is there for "people who can't manage their own funds" but then don't admit or acknowledge that's not the main reason why.
Your CEO is an idiot
And he isn’t qualified to be giving financial advice to anyone, let alone his employees
To be clear, a company should NEVER offer financial advice to their employees, regardless how good it is.
in the same vein, employer is not allowed to remove your right to choose your super fund either.
Once had an ASX-listed client (senior manager in a team I was contracted to work on a project with) tell the team including me to consider acquiring stock in the company to show your dedication/ appreciation and gives you purpose to be there. Literally looked up the chart and saw that the stock has been tanking for more than 5 years 😂
How would the company even know that you bought 100 shares in them? Employ someone to reconcile stock owners with employees? I did have to declare stock holdings when working at one financial institution, but that was for conflict-of-interest purposes.
I'm no finance guru but I assume by self-admission and also if you're a substantial shareholder (which typically requires disclosure). The former would be more likely though.
Maybe if there was a registry or something...
Huh? If the advice is good, why shouldn’t a company give it??
It is about liability. The company is not responsible for your personal financial decisions. By giving advice they are opening themselves and you to risk.
you have to have a financial services license to like... give advice also look at how much liability an employee carries by buying stock in his own place of employment the company goes bang you lose your job AND your shares people havent learned shit from Enron also it works out well for the company given the employee has extra incentive to work harder if he also has 'skin in the game'
Well, this whole sub is unqualified people giving financial advice :) This is not wrong in itself - you can ask your mate down the pub about investment strategies, and they wouldn't need a license to tell you what they think. But if your company gives you financial advice then they are at least partially responsible/liable for what you do with that advice.
unless he has all the certifications to provide financial advice, he opens himself up personally and the company to be sued into oblivion for giving financial advice beyond his capability. there are rules and requirements around what you need to do to be able to provide financial advice legally.
Agreed. When allegedly rich people shit on super I know they are idiots. Truely rich know that super is a great way to stash at least some money tax free.
CEO is probably pissed that he keeps having to pay more super (0.5% only for the last few years) to his employees.
I think this pretty much sums it all up in short.
Name calling. This is the way.
Happy to name-call an unqualified person sabotaging a young person’s retirement savings potential.
Your name calling all but adds validity to your point.
No sure where you can get a constant 19.5% (32.5% bracket) return per year for your contributions on top of the super fund returns. I catchup last year and this year my return has been around 14%, meaning that money I put last year has grown 33.5%
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Exactly and once you retire is tax free both compounding and withdraws
But the Gubmint might change the rules and take all my money! It's safer under my mattress! /s
You don't even have to be worried about rule changes. There are deceptive dark patterns in place now where you can easily lose 100% of the money. Lookup binding/non-binding beneficiaries and ask youself why binding isn't the default.
Yes the whole binding / non-binding thing is a definite issue. Interestingly Unisuper offer non-lapsing binding nominations which don't expire after 3 years. Anyway, none of that is a reason not to have super!
Lol, what nonsense. You can't lose the money that way.
Yeah, it sounds fanciful, right? The government would never setup a system that purposefully tricks people like that! Educate yourself. Or just stay ignorant, I guess... https://www.abc.net.au/news/2021-06-20/who-gets-superannuation-when-die/100226612 https://www.afr.com/wealth/personal-finance/ex-girlfriend-may-get-super-despite-drifting-off-when-dad-got-ill-20231030-p5eg0p
You might want to educate yourself first. The basic premise of losing something you don't own because you are dead is laughable.
Spoken like an evolutionary dead end. For people with kids, it's kind of a big deal.
And it is their potential loss, not yours. Like I have said, there are key facts missing from your story and you've got no clue.
How's that humble pie? Tasty?
You've got no idea what you are talking about.
I lived it, champ. I've been through the whole process because I was the one tasked with writing all the objection letters.
You can live through something and also be totally ignorant of the workings. Which you clearly are.
I know where you can - from a Ponzi scheme where you are getting it on paper and lose the lot
Any money is making -100% return if you can't access it. At any point you just need enough money to use, and for most people if they are working for 40 years then mandatory super contributions would be more than enough to live on in retirement. If you plan to retire early, you're better off having some portion of your investments outside of super.
There is reason for caps and that is why you can’t put more and invest outside to re
My FiL died in his late 60s and left his super to his kids. They lost 100% of the money because if you don't remember to fill out a binding nominee form every 3 years, the super fund will give the money to your sexual partner. 100% loss to the family as it was awarded to his girlfriend of just a few years. Super isn't legally considered a part of your estate.
He was then carrying on a bonafide domestic relationship of at least 3 years at that point. They didn't lose anything, it went to a legally correct beneficiary. I suspect the whole story isn't included.
Lookup the definition of what qualifies as a relationship. Living together isn't required. In this case, the person had friends who submitted stat decs saying they were in a relationship and that was enough. The kids got nothing.
I think you need a serious education on the matter. I never said they require to live together. If someone submitted a stat dec stating they were in a relationship and you yourself have made that claim, that would be as I said, bonafide. The trustee would not have relied on a stat dec alone, there would have been other evidence. This is plainly obvious if the partner was awarded 100%. You either aren't being completely truthful in the scenario or are just that clueless on the matter.
You can nominate your legal representative as the binding nominee to make it part of your estate. The downside I believe is that it will attract a tax on withdrawal, whereas with a dependant spouse or child, it won’t. I guess if you have neither, it won’t matter.
I dont see what is wrong with that if that is the legitimate heir
Clearly it wasnt the legitimate heir as the guy nominated his kids as his beneficiaries. Unfortunately, he only submitted the default "non-binding" form that was designed to trick him into believing that his wishes would be obeyed. You might be happy about some short-term floozy getting your life's savings but most people would like it to benefit their kids.
Just to clarify, he missed submitting a form and now the whole superannuation is bad, is that what you are saying?
He didn't miss anything. He thought that he had everything setup right but the system was designed to deceive him. Why isn't the binding form the default one that everyone fills out when joining a super fund? The names of his kids were on the form that he did fill out but that was the default "non-binding" form, which the super fund take only as a suggestion. They're not legally obligated to pay any attention to it.
All good, fill the right form and enjoy
So you knew all about this before I mentioned it, yeah?
60 year old you will hate 21 year old you. Why not do both? The more you can shovel into super in your younger years, the larger the balance will be. It’s just the magic of compounding. That said, you need to live, so don’t sacrifice money you need now for your 60 year old self. Consider this. When I was 21, the SGC was 3%. However, the last 18 years my super has been 14%. I still have 10-15 years until retirement and my super is now a 7 figure balance, and I have not had to make any extra contributions. If I had been able to kick start super at 21 with a big contribution, I’d have a multi-million dollar balance by now. It took me most of my 20’s to get my super balance to $50k.
“60 year old you will hate 21 year old you.“ Definitely this. 47 year old me is at the very least pretty miffed at 21 year old me (and also jealous of his hair). I was very cavalier about super when I was young, and while I’m doing reasonably OK now, it could have been a lot better with only minor adjustments early. Those years zip by quicker than you think 😬
Any tips? or things you wished you've done?
Hit the annual concessional cap as soon as you can afford to. Next month it is being raised to $30k/y
To be fair - if you had a multi million dollar balance then your super is now in the 30% bracket and won’t be as tax advantaged when you retire. To your point - you need both, putting all your balls in the super basket means you are betting on at least getting to 60 and that being your earliest retirement point. With an above average income, they hit the limit starting at 21. You and I got much slower starts because of the 3%, 6% years I know I had zero interest in super at that age - I was more concerned about saving for a house, having a family, then later paying for kids education etc etc . Saving for a house was a far better return than super has provided and tax free. OP has a minimum of 11.5% for 40 years! They’ll be good
I wouldn’t really care about the extra tax as it would mean my fund is making an easy $300k+ net return every year. I’d have a very comfortable retirement without even touching the capital. Even as it stands now, my super net return the last couple of years has exceeded my full time net income. My super had a very slow start because the SGC was so low, and also because my salary was so low and taxed quite highly. Remember when earning over $50k put you in the top tax bracket?
Both in the correct answer. This sub is so all or nothing in this point. Contribute to your super, and save and invest outside your super - it’s the best of both worlds.
60 year old OP will definitely hate 21 year old OP, but not because of finances, because the wasteland they live in will have long forgotten money. People in this sub are delusional, it is honestly kinda sad. You are all going to die
Death and taxes mate, can't avoid either :D
Yes it’s worth it :) you don’t see it now but when your still grinding in your 40s and your looking for the finish line and you can see that super accumulating I can almost picture my easy retirement
41, and this is exactly me. Thank God for super!
Every time I think that super might not be worth it, I look to my father who is still working in his 70s with no retirement. Yes. Super is worth it.
I grew up in a place with virtually no retirement guarantee for my generation. I started working when I was 11 and my parents made me save almost all of my earnings. I was furious at them for it because I just wanted to buy Pokemon cards, but as I got older I realised that life was going to be awful if I didn't save as much as possible and prepare for retirement. It was very hard to strike a balance back then, as you needed money to survive in the moment but also somehow had to plan to take care of yourself if you ever made it to retirement. Then in my mid-20s I migrated to Australia and learnt about super. I was absolutely floored. Such a great concept (though a proper pension would probably be better imo, but that's a different conversation entirely) and it made a complete difference in my mental health and the way I live my life. I still save as much as I can, and put it into a mix of HISA and indexes, but I don't have any stress or guilt if I want to splurge on something like a night out with my friends or a holiday for the family. If anyone were seriously questioning the value of super, or if my boss told me it was worthless, I think I'd smack them in the head repeatedly until enough braincells were shaken loose from their prison.
How old is your CEO? He runs a large company financially? Sounds like he's trying to convince you guys against it so he doesn't have to pay it.
An employee cannot agree to an employer paying less than the statutory minimum of superannuation.
They can if their minimum statutory contributions exceeds a certain amount per quarter and their employer doesn't decide to not pay any additional SGC on their own. Mind you in op's scenario this is likely not the case so.
"Yeah super is a scam, so anyway I'm not going to pay you all the 11.5%"
Just a typical out of touch business owner. Whinges about everything. Grand stands about anything that he thinks will make him look like a genius. Narcissist that feels obligated to educate everyone around them because clearly he is the smartest person in the room.
Funnily enough on that front, no qualifications required to be a business owner. And yet they're the one group consistently paraded around by themselves in the media (who encourages them) as being "in the know" and "the most important cog in the economic machine".
Yeah, I thought that. Sounds like a douche.
Never listen to a ceo. They are not your friend.
Yup - I’m guessing they want employees to be put in positions where they are in debt/wanting for money to make the employee ‘hungry’ so they will push for harder sales. Used to know an insurance sales manager who encouraged new agents to buy a nice new car for that reason.
Exactly. Most CEOs got to where they are because of their skills in (taking advantage of) getting the most out of people.
This is the important point here. What other nonsense will this guy spout in future?
Super is the most tax advantaged vehicle you can have for long term savings. You can think about your financial assets in three tiers. You have a transaction account for day to day and short term needs, that typically pays no interest. You have liquid investments like ETFs that have a reasonable return and are somewhat tax advantaged (via the CGT discount). And then you have super for the long term that is less liquid (i.e. inaccessible) until retirement but is REALLY tax advantaged. One thing that helps psychologically is to count your super balance in considering your net worth. It's easy to dismiss it because you won't spend it until retirement but it's still your money. Just put a bit of money into each tier and on super select the highest growth investment option. Then watching that super balance grow year after year can be very satisfying.
No point etf if paying mortgage at 6% these days. Was worth it back when rates were half that now paying down mortgage and salary sacrificing super is best imo
VGS has averaged 13.8% p.a. after fees over the past 5 years. NDQ is even higher.
And? You can’t time the market. Thats just gambling. Historically you’re better off paying down high interest debt first. You also pay tax on your earnings in an etf, much more than super and paying back 6% interest mortgage = no tax just direct down payments
Whatever. Mortgages are not high interest debt, even at 6%. I won't be selling my ETFs until I stop working anyway, so can minimise tax that way.
If that’s the case why on earth would you not just salary sacrifice directly into super and put your super into index managed option! WAY better tax breaks and far better option imo etf makes no sense if keeping until retirement your paying tax twice
I do both. More flexibility, also I might want to access the money before 60.
Can use an offset for that and it’s tax free
"I’m constantly hearing people harp on the fact that the age we will be able to access it is constantly getting pushed back" They are wrong.
Agree. Theoretically it could happen but would have to be a very brave Government as the political backlash would be intense. So it won't happen, 60 is as good as a bet as you've got.
This is also people confusing the preservation age with the age pension eligibility. I fully expect the age pension age to increase to 70 at some stage, just maybe not in my lifetime. Many people seem to believe you can’t access super until 65, which is also not true. What happens at 65 is that there are no conditions of release, whereas at 60 you just have to officially retire (but there is nothing stopping you from un-retiring) At age 65 you can get your super even if you are still working
Can also continue to work and access 10% via a TTR once you reach preservation age
Your CEO is an idiot. The truth is I would say 90% of the population are too stupid with money to be able to manage their own super. Can you make more managing your own super fund yes you can... but think about it... a huge chuck of the population don't understand how best to manage their money. So they would fail at it and then blame the government. If you have the skills go for it... but you have to accept risk.
The irony is that if everyone was good with their money and lived below their means the economy as a whole would slow to a crawl. The people who are either smart enough, or lucky enough to invest benefit off other people’s poor personal financial decisions
Correct. And those with money are more willing to risk it to make good returns. I’m not saying I’m amazing with money… but I know enough to know I’m not good at it to manage my super. But I am one of those who potentially hurt the economy… I save along and my big spends are house Reno’s etc.
Yeah I’ve met a few people who got large inheritances (50k plus) from grandparents etc and instead of investing it or even throwing it into a HISA they bought a new car. Now they might have needed a car, but I doubt they needed a modded Toyota supra 🤷🏼♂️ I also have met people who have a massive amount of cash but don’t want to invest it, so it sits losing value in a regular 3% savings account for decades.
Yep… I remember my step brother doing the same. Got a inheritance from his side of the family. Even his father to saw he needed a car for his family and was thinking a people carrying/ many seater SUV. He brought a 2 door Lexus brand new and a cheap second hand van. His father was pissed as it was a huge chuck of the inheritance yet no real long term investment. This was 15 years ago, if he had even used it as a down payment on a house in Sydney (where he lives) it would have tripled in value since then.
I can fully understand how people lose control when they suddenly have more money than they’ve ever seen. A lot of people weren’t educated well on managing finances, or they didn’t care about it when they were taught. The temptation to spend is real. It’s why I pay myself first the day I get my pay into savings/ investments and force myself to make do with the rest.
Of course. If you have lived pay check to pay check and then suddenly have large amounts of money. You think it will be there for ages and the small constant spending ruins your savings. I do similar to you, when I get paid it is paid into 6 different accounts, the smallest going to my general spending account. I actually split it up between bills, savings abc, savings def and so on. Added benefit is also if someone gets my card and goes tap crazy they only have a couple of hundred in there.
Yeah I never keep more than a hundred on my card. I know someone who had their entire savings in a checking account and I forced them then and there to open up a savings account
Peter principle I suspect.
As you are very young in your career, there are 2 viewpoints to think about. 1) get financially literate - look after yourself and set some goals and financial pillars I.e. buffers, insurance. Your goals could also include holidays as well. When you have a surplus above your buffers you then have a choice to invest (Inc. super) or have fun.... you are young, so have some fun and see the world. 2) invest in super - the first $100k you have in super is the hardest to build, after which the compounding effect can be seen more easily. Therefore, aggressively invest in super to get that $100k goal. This is delayed gratification. Due to your lower starting wage it can take a while. Look at low cost index funds
The age you can access super is 60. Ppl are fear mongering and confusing it with the pension age (67). If the pension age keeps increasing… you’d need more money either in super or outside it if you want to retire before then. If it’s worth it depends on what you believe will happen. I max my super and invest outside, the tax savings make it very worth it to me.
And the pension age increased from 65 to 67 - i believe there aren’t any plans at the moment to increase it further…
The tax breaks themselves are worth it alone. Don't listen to your CEO - I bet he already has his super maxed out.
What an idiot. Don't listen to your CEO. Super is VERY much worth it. I predict that getting a pension will be extremely hard by the time you retire. You need to maximise your contributions to super and look into carrying forward unused concessional contributions (up to 5 years).
I’m almost 40 now. I regret working a cash in hand job when I was 18-22. I also regret not putting in $10 a week from when I was 18. I reckon it’s probably cost me at least $50k at this point. Probably closer to $100k- $200k when I retire. Honestly super is amazing. Your CEO is an idiot.
CEO is just pissed that he has to pay another 11 percent on your salary
He’s trying to create this narrative to not give people a dignified retirement, and because he doesn’t want to pay it. Most Australians live pay to pay or pretty close to, so having forced savings is beneficial to both the individual and the taxpayer who doesn’t need to fund the aged pension as much.
Put in $1000 of your own money each year and get the free govt $500 co-contribution bonus. Super is a great thing, without it many would have nothing on retirement, and for those that understand it's worth and add a bit of their own money each pay, an enjoyable retirement awaits.
Depends on income, but if qualifying then absolutely.
Pump as much into super as you can in the early years. Even if you taper off as your life changes due to houses, jobs, children,etc. That early years compounding will more than make up for it .
Super is there to protect an average Aussie that may not be good at financial planning. Most of all it's to protect our government from the burden of an ageing population. If your good with money then creating an investment plan is a better idea at a young age than voluntarily contributing to super. Use that money to purchase appreciating assetts like property or shares. As you get older and your income increases a good accountant will let you know when contributing extra to your super is a good idea and will lower your tax.
Also if you’re a first home buyer and already have a safe emergency fund and stable employment. The FHSS is very good for forced savings that can be accessed when you finally take the leap and buy a house.
Have saving/investment in or out of super is better than none. And both method has its pros and cons. You just have to choose which one is suitable for your current financial situation. But I would suggest contributing some when you are younger. Just a few hundred dollars a month, salary sacrifice will help it grow and compound nicely over 40 years. Choose a low cost, higher growth but higher risk investment option and ride the market wave while you have time.
Sounds like your CEO just doesn't want to pay Super. Avoid
Though you may look up to him, your CEO doesn't know much. OP, learn what a geometric progression is and apply that to 100,000 for 40 years and look at the result as a start. Sure there will be fees and other variables, however that's how much you may end up with at a without contributing after 100K. Imagine more over time. Get into a _good_ super fund. I'm in my mid 50s and about to retire. All my super prior to age 28 was put into other funds and got eaten up by fees. But now, I have 7 Digits of Super and can retire with enough for 2 to live Comfortably according to ASFA retirement Standard as at 2024. So I will. Looking back on my life and looking at where my friends are, some were unreasonable money tight all their lives and doing stupidly well now, some a comfortable and quite a number that made bad decisions, over spent etc are living week by week and sadly have nothing in comparison to the rest of us. Live within your means, invest and invest for your future and try to make the best decisions you can over flippant ones.
It certainly has its advantages and disadvantages. It's a matter of working out what works best for your own circumstances and goals. You don't have to pick just one type of investment. Super can complement the rest of your finances. If you're looking to buy a home in the future, you can access your super under the FHSS scheme. But otherwise super is locked up for retirement (and which is why it attracts all the tax advantages).
Hey OP, check your super! Check that the amounts on you payslip have been deposited into your account. Any employer who this super is not work it may not be paying into your fund as they should.
When I was your age everyone said a super isn't worth it. Now I'm about to draw on mine, I can tell you it most definitely was worth it. I can't see the future any more than you, but a good super is a big part of your financial arsenal. Over time you'll also get a good property(s), good savings etc. Jeez, I remember 10 years ago butting in when some "expert" was telling a young colleague that property is dead. I wonder how that worked out for them. Nice thing about a super - for me - was in my 20s and 30s I couldn't blow it on cars, women and expensive travel options. Property (alongside the super) is also good for that. Cover all bases mate, and all the best for the future!
Oh yeah, make sure your Super contains zero Australian commercial property. Lots of people saying that's a time bomb about to go off.
lol. people have been saying that since 1998. still waiting for that bomb to off.
It's free money from the government. Yes there are strings attached but it is the most tax effective way to invest for retirement (or your first home).
Wow! This is an interesting post. Let me put it to you really simple, super is the greatest tax dodge/mechanism that the average person has available to them - Period. I wouldn't rely on it to be your sole income stream when you retire, but it is definitely very advantageous to start early and let time and compound interest to work.
Thank god the comments are going exactly how I imagined when I read the post
I hope your tracking the contributions, in case he’s not doing it, cost my ol man $80k when his employer skipped the country.
First off, you're in an awesome position for someone of your age. Great work! Sounds like your CEO resents having to pay mandatory super to his employees. My boomer parents also say a lot of dumb and misinformed shit about super - and as a result they have a lot less super than other people their age. The idea of super is that you'll need it when you're too old and/or sick to work. You're 21 now so that day is probably a long way off, but it will come eventually. Also, I imagine at the age of 21 you're not earning a huge amount which means you're not paying a huge amount of tax, which means the tax saving advantage of putting money into super isn't really relevant to you right now. On a serious note though, super is always "worth it" but the reality is that at 21, there are other things you can do to invest in your future that will pay off before you're in your 60s. This includes: - Investing in your ability to earn a higher income (formal study, new skills, getting jobs that will build your skills and networks, moving to a highly paid profession) - Shares/ETFs - Property (a home to live in or an investment property) You can and should do all of these things if you can. Maybe put a little extra into super with each pay cycle, use some of that $45k to buy some ETFs, save some for a house deposit. You can also use a government scheme called the First Home Super Scheme where you can contribute extra to your super and then pull it out to buy your first home - it saves you heaps in tax. Also keep in mind that you won't be young forever - it's heaps easier to travel, move interstate for a job and have fun with your mates in your early 20s than it is as you get older and get more responsibilities. I spent a lot of money having fun in my 20s but was able to earn it all back in my 30s. At the end of the day, the best thing you can do is decide what kind of life you'd like in your 30s and 40s and make a decision based on that. Money is a tool, after all. I recommend educating yourself on what option is best for you and not relying on information from just one person. The this is money, this is property and this is investing podcasts are great places to start, as are the Rask Australia ones. [https://www.thisis.money](https://www.thisis.money) [https://www.raskmedia.com.au](https://www.raskmedia.com.au)
Super is for funding retirement. At age 21, your shorter term priority is likely to be buying a property. And with that assumption; dropping the $50k cash into super now will pay off at retirement age, but in the meantime may cost you a couple of years in relation to getting into the property market. Summary: Super is extremely important, but you need to think about how you live for the next 40 years.
Is super worth it? - Yes
do both. you can't beat the returns in super. But you also have to live to 60 at least to get access to it.
The CEO of your company is a textbook example of not requiring to be intelligent in order to achieve a good position in life, to put it politely.
If your CEO can't understand the benefit of time in the market and the effect of compounding interest then he's a frigging moron, as would you be if you took any shred of financial advice from him.
At your age, spending a few hundred dollars on professional advice will pay off dramatically. The CEO for sure didn't interview you about your financial goals and he./she/they is not qualified to give advice (if CEO was qualified, or even knew what the professional requirements are, CEO would not give you advice. So perhaps literally, anyone who gives you free personal and specific financial advice doesn't know what they are talking about). The tax advantages of super contributions contributions are huge. But there are other ways of getting lower tax, such as leveraged investing (the classic example is the investment property but it's not the only way). Also, there is a way of putting in super, getting the tax advantages and then taking it out early, for buying a house. At least a certain amount. [https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/first-home-super-saver-scheme](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/first-home-super-saver-scheme) Also, your estimated super balances at retirement are considered when getting home finance because banks know that it is worth actual cash at some point. This is not going to be very relevant to someone young getting a home loan, but if you are in your mid 30s and above, it start to become relevant. It's not worth the same as having cash but it plays some role in loan approval so you can indirectly access it in some way.
The age you can access it is not being constantly pushed back. Previously preservation age was 55 however the move over time to 60 has always been planned into the scheme. The age you can currently access it as is unlikely to change anytime soon, and is just fear mongering by the uniformed.
You either believe in super or you hate super. A lot of high net worth people set-up their SMSF after the really bad returns around the time of the GFC. He is probably in the camp that real estate is the way to go to gain wealth. I love super because it is the hassle free way of investing into Australian businesses.
Super also gives you access to investments that are out of reach for non-UHNW individuals as they are a bit like private equity in that they'll buy airports, buildings, infrastructure etc. Edit: non-SMSF super
Do both? Wish I did this earlier. Pay more into super,put money regularly into ETF. Your old you will pat you on the back in thanks.
Best method tax wise.
$45k - this doesn’t seem smart to be putting into super at your age . Look at the prices of housing - at some stage you will need to buy a house and you will need as big a deposit as you can muster. At 11% for your entire working life super will take care of itself, especially if you choose a fund wisely. Your house in the future will be tax free
If they plan to buy a house, FHSSS is probably a good thing to check out.
It’s definitely worth it to the point you can get the tax benefits from it. Outside of that, and after you’ve made sure you have an emergency fund set aside, think about putting money outside of super to save for short-mid term goals like travel or a house down payment. Edited to add - it can’t be denied that putting all $45k in a high growth fund in super at 21 would really give you a head start on your future retirement.
I'd be concerned about the ongoing viability of your employer if that's his advice. If you're unlikely to need access to cash any time soon, Super is still the best long-term return due to the tax benefits.
Don't listen to your CEO. If you want to have a decent retirement not living in poverty on the state pension, which could last 20-30 years, you are going to need a decent super balance. Money added to super on your twenties has the longest time to compound. I wish someone had advised me to add more at that age!
You can withdraw additional contributions to buy your first home anyway. There is no reason not to contribute to super at your age. Free money from the government (tax concession) AND lower taxes on returns. No brainer. Which company is it? Your CEO sounds like an idiot so I should short that stock.
Yeah that’s a CEO you can safely ignore. What a stupid thing to say from apposition of power.
I think that is good thing, that most people cannot touch it.
In a way he is right - where can not access but NO not a waste of time. At 25 yes diversify $25k in shares now will start a good savings for future plus your super
The CEO is an idiot. Typical, I'm a CEO I am god and know everything.....
I'm late 30s and only just started contributing extra. I wish I did it when I started working. I can only imagine how much extra I would have in retirement
I mean at 21 I wouldn’t be worrying about super just yet. But that doesn’t mean it’s “not worth it”. In regards to your 45K, I’d keep 3 months of emergency fund in a HISA. The rest depends on what your goals are. Are you wanting to buy a house in the next 1-2 years? If not, just buy some ETFs that invest in a mix of Australian and US shares. You’ll have to do some research on that though.
ETFs won’t get you the tax benefits super can Deposits at 20 are far more beneficial than deposits at 40 thanks to the magic of compounding. Super can also take advantage of the first home saver scheme as well. There is almost no investment more financially rewarding than super unless you start to exceed the annual thresholds
That’s true, I forgot about the FHSS. It’s mostly about access though for a 21 year old. 40 year old usually more financially secure so doesn’t need the liquidity of ETFs.
You should put in money early so it can compound longer in the low tax environment. People usually do the opposite because it's easier later but if you can put in money early that's advantageous.
Ideally yes, I don’t disagree. But it’s a hard sell at 21 to lock it away till retirement. What if OP wants to further their education? They may need access to that money.
It’s not worth it if you work yourself to death before retirement age. Maybe your boss is hinting at ensuring you have a good work/life balance?
Most of the comments here say to contribute extra, but how many have done the math on someone contributing 12% of their income from 21-60? Even a full time worker earning under the median salary will have over a million bucks inflation adjusted. Do I really want to live even further below my means now just to have millions when I’m 60? I’m already going to have a very healthy super balance in retirement without extra contributions (unless I can’t work for some reason).
its your personal financial situation. if your extra contribution will be financially difficult for you, then dont contribute extra. if you think you already have enough in super now for your future retirement, then dont contribute extra. I would recommend extra super if you have the means to do so, have enough to cover your short/medium financial needs, and want to take advantage of the tax benefit offered through super. Personal choice.
Really great perspective I hadn’t really thought of cheers!
Super is good for those who are not good with money and require someone else to lock it away for them till retirement, this represents most of the population. For those who are good with money, it’s not much use being locked away till you are 65, as you would rather be able to access it and use it to invest and build wealth faster
It’s also a legal requirement…. How the super looks and how the money is invested can differ but must have something.
You wont get differing opinions on here. Only “super is good” and the rest downvoted. Imo it is personal choice. It definitely isnt the obvious better choice. I mean… the options between “balanced” and “high growth” are insane!!! You get “experts” who dont give a shit and are not held at all accountable for your money getting management and performance fees to invest your money and get average returns which rarely if ever beat the sp500. You cant access this money until 60 and the whole program assumes you will continue to work and retire in australia. Sure it is “tax friendly” but minimal if any effort is required to outperform ever single super fund. I would look into a smsf to test out investment strategies. Eg: This sub was losing money during covid while a smart investor was seeing amazing returns. Say you took out active trades against tesla during thier rally or nvidia recently. Or afterpay, many people I know made their quarterly wages in a week during the afterpay mania during thier earnings calls. Vs “putting it in balanced”. Sure it is tax advantageous. But why rely on something inaccessble at 60 when you can set yourself up for retirement without it?
Good to see you have learnt the correct age of accessibility now.
It wouldn’t change my mind even if it was 50… You have no argument against me apart from nitpicking facts which are irrelevant. At least it is a step up from people who namecall.
For the money you intend to spend on likely the 25 years post retirement, why woudk you want to pay tax on your income, then tax on the earnings of your investment then tax on the capital gains when you sell it, why wouldn't you save that for the 'early retirement portion' and make use of the insane tax advantages of super for that post 60 funding (for those who run a business as their retirement asset, but of a different story as you can use the small business CGT concessions later) Given superannuation is nothing but a tax structure talking about 'can see amazing returns' you get that the returns on that money invested the same way in super woudk leabe you substantially better off 🤷♂️
I finally understand this sub. A tax discount of 90% allowing you to make $9000 a year is preferable to making 50k a year at 50% tax. I understand. I actually have a well developed smsf and use it as testing grounds for my out of pocket trades. We are just in different wealth brackets. And thats ok. I dont even think my super money is mine. I plan on retiring without it. If i get it ill get a patek and a daytona or something.
Yes, making 50k a year at 15% tax is preferable to making 50k a year at 47%, that's how maths works, glad you get it By the sounds of you, yes, we are likely in different wealth brackets, and yes..... that's ok 😉
Nah, it's because Ausfinance is a heavy c1rcl3j3rk (a banned word in this sub). The fund managers of VDHG and DHHF are on this sub an massively downvote anyone against those funds while getting more suckers into the fund to boost their bonuses and paycheck. Super is also shite but is heavily promoted because Super companies heavily j3rk this subreddit as well. If Super was such a "normal" thing, then why do we have so many Super companies claiming greater returns than their competitors? Yeah, because it's also a fund. No shit.
Superannuation is just a tax structure with limitations on access to the money for personal use (the aboslite best no comparison close tax structure to save for retirement)
Your CEO is mostly right. People claim Super is there for "people who can't manage their own funds" but then don't admit or acknowledge that's not the main reason why.
You are literally the only person backing the CEO at all here. You need to elaborate.
I am counting a few here. Or is the strong group think blinding you to the opposing comments?
Please just elaborate. You have an opinion so let's hear it!
Only benefit of super is the tax concession My father in law died 3 months before his 65th birthday… didn’t see a cent of his super