September Newsletter

From Steve

While I do wonder if my tired old body is up to it, I have entered my second “Obstacle Course Racing” event. This is due to be completed this week. Notice that I say ‘completed’, and not ‘competed in’.

I did the Spartan Super a month or so ago, and it was a bit of fun, particularly being chest deep in freezing water on the shortest day of the year.

Anyway, this week it is “The Stampede”, and I am looking forward to giving that a go, on the proviso that my knees and hamstrings hold out. I’ll give you an update next month.

Steve

Superannuation

The Jargon that makes it so hard to Understand

Most of us have heard that superannuation will one day be one of, if bot the biggest assets that we own. It is for this reason that it is so important to ‘take control’ of your super.

However, for most people it is still confusing, and as a result, it is left in the ‘too hard basket’ and something to worry about later.

One of the biggest issues to overcome is the 'jargon' and technical terms that are used. It seems that these are almost used on purpose to make it difficult to understand.

So, here’s a few explained.

SG: Stands for Superannuation Guarantee.

It is the amount that all employers must pay in to their staff members’ super fund. It is currently 9.25%, and is expected to rise to 12% by 2019.

Salary Sacrifice: Any ‘before tax’ money that you out into your fund. It is separate to the compulsory SG, and it is not the same as ‘salary packaging’.

Contribution Caps: This is the maximum amount that can be contributed to super. The maximum this year is $25,000 of before tax money (for people under 60) and $150,000 of after tax money.

Balance

Finding the right fit between lifestyle and financial goals

If you were to work 80 hours per week, spend nothing and save everything you had left, then assuming you made reasonable investment decisions, you would be likely to have a large bundle of money available to you when you retire. Of course, if you did work 80 hours a week, you might not have time to spend any money any way.

At the same time, if you spend everything, and even spend a bit more than you get, then the SG contributions to super are unlikely to be enough to sustain you in retirement.

The best answer of course, is that what’s best for you depends on your individual circumstances.

However, our spending does have financial consequences, and, in short, these are a lack of funds put toward debt, protecting your income during your working life, and providing an income beyond your working life.

To talk further about working through these issues, give us a call to see what works best for you.  

Thanks

I'd like to finish off by thanking Clint and Danni for referring their friends to us for advice. Referrals are the life blood of our business, and we'll do our best to look after them.