Investing made simple

00:00:15:01 - 00:00:47:06

 

Unknown

 

Hello and thank you for joining us today for our next I Want To Know webinar. My name is Jackie Clark and I'm the CFS Education Manager. Before we get started and in the spirit of reconciliation, I acknowledge and pay my respects to the Gadigal people of the Eora Nation on whose land we work on and meet today. I also acknowledge the traditional owners of country throughout Australia and respect the continuation of cultural, spiritual and educational practices of Aboriginal and Torres Strait Islander peoples.

00:00:47:22 - 00:01:09:16

 

Unknown

 

I pay my respects to the elders and traditional custodians past, present and emerging. Today I'm also joined by Kelly Power, who is our Chief Executive Officer of CFS Super and importantly together we are here to discuss some of the simple ways that we can help women grow their super, boost their super for the future. Welcome, Kelly. Thank you for joining us.

00:01:09:17 - 00:01:39:00

UnknownThanks for having me. Today, as I said, we’re going to cover a range of different topics. So we are going to look at the gender super gap, why that exists. We’ll also do a bit more of a deep dive into the pay gap that exists between men and women and how that impacts on our super. Then we’re going to look at some of the ways that we can help our members, particularly our female members who are joining us today, look at ways that they can actually build their super for the future.

00:01:40:10 - 00:02:07:02

 

Unknown

 

Yeah. Look, it’s really great to be here. Thank you, Jackie. I mean, this is a really important issue, and I think it’s something that we need to discuss and we need to work through and you know, something that I'm particularly very passionate about. I really want to help our female members. And in fact, all of our members have an understanding of why it is that women are retiring with less money than men and what it looks like to have a comfortable retirement.

00:02:07:03 - 00:02:32:22

 

Unknown

 

And I think these conversations are really important in actually bring awareness to this, but also giving people tips on what they can do to sort of, you know, starting now to start to top up your super so that you can have a more comfortable retirement Great. Well, that’s a great place for us to start. I think many of us will be familiar that there is a gap that exists between males and females in terms of our pay but what do we mean by the gender super gap, Kelly?

00:02:33:15 - 00:03:10:22

 

Unknown

 

Yeah. So when people talk about the gender super gap, what they’re talking about is the difference in amounts that people have when they retire. So typically, if you’re a woman, you will have less than a man when you hit retirement. And I think the stats are that it’ll be about 16 to 24% in terms of the gap. So to put that in context, a man aged between 60 and 64 would typically have a super balance of about $234,000, while a female the same age will retire with about $193,000.

00:03:11:21 - 00:03:44:12

 

Unknown

 

So let me just replay that. That actually means someone, a female aged 60 to 64 is going to have a super balance of about 17 and a half percent less than the male of the equivalent age, which translates to about $41,000. That’s a significant amount of money. It’s a big difference. Yeah, it is. And look, I think that the thing that people need to be aware of and think exacerbates this is that the actual average that both men and women retire with at retirement is well below or

00:03:45:09 - 00:04:15:19

 

Unknown

 

well short of what the Association of Super Funds of Australia own, also known as ASFA, estimate that people will need when they hit retirement. And so if you if you’re thinking about having a good comfortable standard of living when you get to retirement, it’s about $545,000 for a single person. Yeah. Kelly these numbers are a little bit disturbing why in 2022 when we have compulsory super in Australia, do we still have this super gap?

00:04:17:09 - 00:04:41:15

 

Unknown

 

Look, they are absolutely disturbing and it is something that I think, you know, we need to bring awareness to it and we need to support in closing. There’s numerous issues, numerous factors that contribute. I think the broader, the broadest and the most significant one is the gap in pay generally. So your superannuation is a percentage, your superannuation guarantee, or SG, is a percentage of what you earn.

00:04:42:10 - 00:05:12:15

 

Unknown

 

And so if you’re earning less as a woman that will flow on to the amount of super that you have. So typically women earn less than men. And therefore, you know, as a result their superannuation amounts lower. In fact the Government has a workplace gender inequality agency and they've just published their recent findings and there is a little bit of good news in terms of there is a slight improvement in that gap but unfortunately it is still significant around 22.8%.

00:05:13:04 - 00:05:36:00

 

Unknown

 

Someone actually said to me once it’s like working one day for free, which none of us really want to do. What does actually this mean in terms of dollars? It’s about $25,800 less in earnings each year for women. Now you've just mentioned that our earnings are tied to our super. So we know that at the moment 10% of our earnings go into super each year.

00:05:36:13 - 00:06:00:22

 

Unknown

 

So that means around $2,580 less in annual super contributions for our members, which is a lot of money, particularly if you’re only just starting out in the workforce, you know, 40 odd years until you retire. So that’s a significant amount. So let’s have a chat, a quick chat around some of the influences or key reasons why this pay gap exists.

00:06:02:14 - 00:06:34:10

 

Unknown

 

Despite legislation being in place, there is still discrimination and bias in terms of women being able to access certain roles. And won't be a surprise to you. Kelly, as a board member, still under-representation of women in senior roles. I think the Australian average for females representatives on boards is around 33%, which is still quite low unfortunately. As we all know, senior roles are typically where the higher income potential is as well.

00:06:35:03 - 00:06:59:20

 

Unknown

 

We also see what they call job segregation across industries and what we mean by that is that in male dominated, dominated industries such as construction, we have a bigger pay gap which is around 30% compared to more traditional female type industries like education. The gap is a lot, a lot smaller. It’s around 10%. And of course, workplace flexibility.

00:07:00:08 - 00:07:28:14

 

Unknown

 

I know you have family. I have family. It’s an important consideration for a lot of females. And the lack of flexibility. We’re very fortunate at CFS. We've got great flexibility, but a number of employers don't offer that. So it makes it difficult for women to stay in those full time positions. This leads this, I guess, to something a lot of women choose to do, and that is to work in either part time or casual type of arrangement.

00:07:29:08 - 00:07:56:01

 

Unknown

 

It’s interesting, the same report that I referred to, the Gender Workplace Equality Agency report over 50% of our workforce is female. Yet of those people working, that’s women working, only 41% of them are in full time roles, which means we’re generally in part time or casual positions. And again, let’s go back to your comment earlier where we were saying that our earnings are tied to our super is tied to our earnings.

00:07:56:18 - 00:08:21:09

 

Unknown

 

That means we've got less money going into super. We've also seen this big trend towards casualization of the workforce and that basically means where our hours are very flexible, which is great. The downside is we don't necessarily have job security. And again, our income is very, it fluctuates a lot. So we’re not exactly sure what’s going to go into super.

00:08:22:07 - 00:08:46:07

 

Unknown

 

Unfortunately, during the pandemic as well, these are the first type of roles that people lost their jobs in. So impacting will be really interesting to see how women’s super balances are challenged over the next couple of years as a result of that. Yeah. Thanks, Jackie, for that. It’s really important issue and definitely something that we need to bring awareness to and I think it’s good that we’re having the discussion today.

00:08:46:14 - 00:09:10:16

 

Unknown

 

There’s some actually fantastic news for people who are working in those part time or casual roles, and it comes out of some recent legislation. So previously, the way that superannuation worked, your employer did not have to contribute to your super if you earn less than $450 per month and that didn't take into account that you might have more than one job, meaning that you combined income was over that threshold.

00:09:11:04 - 00:09:46:11

 

Unknown

 

But from 1 July this year and this is something that the industry has been advocating really heavily for, that $450 threshold will be removed. And so your employer or your employers will now make superannuation contributions into your account on your behalf. And that’s regardless of the amount that you earn. If you think, for example, someone that currently works three jobs, each earning $400 a month for each of those roles, or combined income of $14,400, you’ll now have $1,512 contributed to your super from the 1st of July.

00:09:46:22 - 00:10:17:13

 

Unknown

 

And that’s compared to zero, if you if you think about the previous rules. If you take that forward over a 40 year time period, this could end up equalling something like $84,000 or substantially more depending on how your super is invested. So it’s a really big step forward. It’s something that will undoubtedly help many women who have multiple roles or have income below that $450 threshold and it will help them to grow their super and set them up so that they’re better prepared for their retirement.

00:10:18:14 - 00:10:40:14

 

Unknown

 

Oh look, I even my own children who have just started work in a part time, they’ll obviously get some super now, which is a great we want them to get these early great starts for superannuation. So yeah, I agree with one of the things with super the earlier you start, the smallest amount you contribute just because of the way that compound returns work and interest works does add up to a lot in the long term.

00:10:41:00 - 00:11:05:15

 

Unknown

 

Look, one thing I should mention from here is that that change doesn't apply if you’re under 18 and work less than 30 hours a week. So there is one condition to, to that payment being made. Great. So that that’s one positive change. What else can our members do? And the title of today’s webinar is Simple Things Women Can Do To Boost Their Super, what other things can we do to help close that super gap?

00:11:06:17 - 00:11:29:23

 

Unknown

 

Yeah. So look, there are a number of things and one thing I would say is that, you know, it’s never too late to start considering there’s always options for this, you know, for members to think about the type of retirement lifestyle they want to have and how much super they’re likely to need to afford that lifestyle. So I guess information, education, conversations like this are really important in the first instance.

00:11:30:05 - 00:11:58:01

 

Unknown

 

So we've mentioned those ASFA estimates that a single person will need. So it’s around $545,000 to have a comfortable retirement lifestyle. And it assumes that a comfortable retirement lifestyle includes, you know, being able to meet your ongoing expenses like running a car, you know, buying food, groceries, air conditioning, heating, private health cover, travel, maybe one or two trips domestically or internationally a year.

00:11:58:12 - 00:12:17:20

 

Unknown

 

And I know, I know it might sound obvious but unless you know what your financial retirement goal is like, how do you know if you’re on track to meet it? And how do you know whether you can afford that lifestyle and how you’re going to fund it. We’re very fortunate in Australia that we have access to the Aged Pension, which is that the mandated government pension that is paid.

00:12:17:20 - 00:12:46:13

 

Unknown

 

However, what a lot of people don't realize is that not everyone is eligible for that pension. It depends on two things your assets and your income. So having enough super is also key, not just relying on that age pension, but again ensuring to have a comfortable retirement that you've got that super nest egg that’s available for you. The other thing that we know is that our care requirements and associated expenses tendto increase as we’re at the later stages of our life.

 

00:12:46:13 - 00:13:05:06

 

Unknown

 

So aged care, etc. So it’s important that our super lasts the distance. So the sooner our members start to take an interest, start to take action, putting a little bit of money aside or putting a plan in place to address super shortfalls, the less they’ll need to contribute or top up when they get sort of into that retirement age.

 

00:13:05:06 - 00:13:30:12

 

Unknown

 

And, and, you know, overall, the better that their retirement lifestyle will be. But it’s never too late to start, right?. It’s never too late to start. You can always start making, you know, taking an awareness, finding out where you super is, making sure that you’re making those small top up contributions at any point is important. Look, one of the things that CFS has done is created a calculator to help you work out exactly how much you need to contribute to your super to help you to achieve your retirement goals.

00:13:31:01 - 00:13:49:19

 

Unknown

 

If you go onto the CFS website, you can find this calculator. So that’s one sort of simple step. Go online, check the calculator, have an awareness of how much you need. The second action you can take is to engage with your super. So, for example, do you know what you’re super invests in? Do you know how it’s performed?

00:13:50:02 - 00:14:10:01

 

Unknown

 

What insurance cover do you have and is that insurance cover appropriate to your circumstances? Are you paying for what you get? What is your super balance? What fees are you paying? Actively engaging with your super and knowing the answer to these questions you’ll be able to work out if your superannuation is on track. And if it isn't performing as well as you expected,

00:14:10:01 - 00:14:32:00

 

Unknown

 

you can take action now and you can address it and you can consider what options available for you. So for example, it’s important to understand what your super is invested in and there are many options that are available here. We all are unique. Our circumstances are different. Our, you know, risk tolerance is different. That will be different from my partner, my friends or my family.

00:14:32:10 - 00:14:59:06

 

Unknown

 

If you've got a long time until you retire, you might want to consider more growth oriented assets which are available through our investment options. And so they, over the long term, typically will provide a higher a higher return to grow your super faster. Of course, that option does carry more risk, whereas someone who is getting closer to retirement may be more concerned about like investment market’s going up and down or what’s called volatility.

00:14:59:14 - 00:15:23:22

 

Unknown

 

And you might prefer a more defensive option where investments are protected from some of that market fluctuation and volatility. So while we can't provide you with advice on which option is best for you, what we can tell you that over the life of your super situation will change, and therefore it’s really important to check in and make sure that you’re invested in the right portfolio for your circumstances.

00:15:24:03 - 00:15:54:05

 

Unknown

 

Yeah, I agree, Jackie. I think what’s really important is that you’re consistently checking in on how your super is going, and that includes how it’s invested and making sure that it suits the stage of your life that you’re at. Absolutely. So what about insurance and why is it important to check in with the insurance that you have or maybe have through your super? Yeah look, paying for insurance through super can be a really affordable and cost effective way for you to ensure that you and your family are adequately protected if something tragic did happen.

00:15:55:07 - 00:16:22:05

 

Unknown

 

This is particularly important if you have debts like a mortgage or you have significant responsibilities such as, you know, a family that relies on you for financial support, but that does come at a cost. And so the premiums you pay are deducted from your super and it will impact your super balance. So you need to be aware of balancing out your need to protect your income now as well as those income and retirement needs in fast forward into the future.

00:16:22:19 - 00:16:43:01

 

Unknown

 

So as your circumstances change, similar to what we were discussing relating to investments, I mean, maybe you paid off your debts, maybe your children are older and, you know, maybe you’re lucky enough for them to have moved out. I don't think it’s ever going to happen. And maybe you don't need the same level of insurance. And so by updating the level of cover, you might save on some of those premium costs.

00:16:43:01 - 00:17:03:09

 

Unknown

 

And that means more super available to you, more super earning money for when you hit retirement. But again, the importance of checking in and making sure it’s relevant to your situation at that time. Absolutely. Another great way to engage and to learn more about your super is by attending webinars such as this one. So just even by being here today, you've taken the first step.

00:17:03:24 - 00:17:27:10

 

Unknown

 

You can find a recording of today’s webinar and other ones we've run at CFS, on what’s called the learning hub. You can access that via our website. Fantastic. It’s all about getting started and doing something proactive to manage your super. Yeah, just taking an awareness and, and looking for the tools that are available. I mean, CFS also has an app as well as an investor portal that’s available.

00:17:27:10 - 00:17:55:12

 

Unknown

 

It’s called FirstNet. And you can go online there and find out more about your super, such as your current balance and the fees that you currently paying and where you’re invested. And of course, there’s always our contact centre as well. So always happy to help. Give us a call if there are any questions that you have. Fantastic. Three simple ways, actually, way more than three, but three key ways that all our members, our female members can take to engage more with their super and check in.

00:17:56:16 - 00:18:15:05

 

Unknown

 

Let’s talk about some other strategies I might take over here, if that’s okay. I'm going to talk about some additional ways that our members can actually contribute to the super. So you've talked about engaging more and how that can help. I'd like to talk about some of the simple ways that members can add more to their super.

00:18:15:11 - 00:18:47:16

 

Unknown

 

And the first one that some of you may be familiar with is salary sacrifice. Perhaps one of the things many of us assume is that what our employer puts into super is going to be enough when we retire. You've spoken about the super guarantee before, and that’s that 10%. But what that doesn't factor into account is when you start with your super what age, if you take any time out and again, what retirement lifestyle you actually want. I might want more than a comfortable retirement or I may not need as much.

00:18:47:23 - 00:19:23:21

 

Unknown

 

So we have to take those things into consideration. So assuming that my employer is probably very generous at the moment and putting the 10% in, but I've taken time away when I've had three children from the workforce, then my super I need to top it up a little bit and put a bit more in. So salary sacrifice is perhaps one of the easiest way for you to contribute to your super. So salary sacrifices where you ask your employer to make extra super contributions into your super account straight from your employment income before any tax is actually taken out.

00:19:24:08 - 00:19:53:12

 

Unknown

 

So this is on top of the compulsory contributions they’re making already for you that 10% we've referred to a couple of times as well as saving more for your retirement. The added benefit of salary sacrifice, depending on your personal tax circumstances, is that there is the potential for some tax benefits now. It’s the money that goes in super is generally taxed at 15%, whereas your marginal tax rate or individual tax rate may be significantly higher than that.

00:19:54:15 - 00:20:21:21

 

Unknown

 

So how effective the strategy for you will depend on your personal circumstances and your individual tax rate. So let’s have a look at an example of what a difference salary sacrifice could make for just a small amount that you sacrifice from your salary. So here’s an example of the kind of difference just a small amount could make. Kim and Robin are both age 40, both earning a salary of $80,000 a year Kim, who doesn't

00:20:21:21 - 00:20:49:07

 

Unknown

 

salary sacrifice ended up with the super balance of just over 300 or nearly $346,000 when she retired at age 65. Robin decided salary sacrifice 2.5% of her income each year, which meant she had around $25 less take home pay per week then compared to Kim. But when she retired, her super balance was just short of $400,000.

00:20:49:17 - 00:21:18:15

 

Unknown

 

So she actually had 54, just over $54,000 more than Kim. The great thing about salary sacrifice is there’s actually no minimum amount required although there is a maximum that you can contribute to get that cheaper tax or that lower tax rate of 15%. This is called the concessional contributions cap that currently is $27,500. So the good thing about salary sacrifice is you’re not locked into these arrangements.

00:21:18:15 - 00:21:46:13

 

Unknown

 

So you can stop or increase them depending on what your circumstance is. So it’s quite flexible. I think a lot of people think you’re locked into these until retirement, which isn't the case. Another super strategy that is a great way for people with modest incomes or lower incomes to boost their super is through the government super co-contribution scheme. All you need to do is to make an after tax contribution in the last financial year to super.

00:21:46:22 - 00:22:12:16

 

Unknown

 

And if you’re eligible and that means you have income of less than $56,112, that’s a bit of a mouthful. The government will contribute a payment of up to $500 to help give your super a boost. So I’ll just go over that again. So if you’re on an income less than $56,000, the government will contribute up to $500 additional money. So sort of free money into your super.

00:22:13:10 - 00:22:37:10

 

Unknown

 

And it’s really easy process. Once you've lodged your tax return, the Tax Office will work out if you’re eligible and then will automatically make a co-contribution to your super fund. Happens automatically. It is important though to check if you qualify for this and we have a lot of articles on our website to search under government co-contribution or of course you can visit the ATO website.

00:22:38:16 - 00:23:07:04

 

Unknown

 

The final strategy that I'd like to discuss, I'm pretty sure a lot of our members won't have heard about and it’s the First Home Super Saver scheme and it might feel a bit counterintuitive when we’re talking about taking money out of Super to help fund your first home purchase. But the Government have recognized that it’s increasingly difficult in a particularly inflated property market for first time buyers to be able to save enough for a deposit for a first home.

00:23:07:07 - 00:23:34:11

 

Unknown

 

So what they’re allowing us to do, we talked before about superannuation being a concessionally taxed or this lower 15% tax, allowing you to make personal contributions into your super account and then you’ll be able to withdraw this up to a maximum of $30,000, and the associated earnings when you’re ready to purchase a home. Now you mentioned before, Kelly, that 1st of July there’s a number of super changes.

00:23:34:20 - 00:24:11:16

 

Unknown

 

This is another one and $30,000 really isn't much of a deposit so the Government are increasing that to $50,000 to help our members who are looking to make that home purchase. So should make it a little bit easier over time for those members. Now why would we be doing encouraging people to take money out of super? Well there are benefits this will help grow your super long term the earnings that can continue to compound into your account and also you’re able to put more into super in that concessionally taxed environment which will help our members as well.

00:24:12:04 - 00:24:42:09

 

Unknown

 

Again, the criteria the government has set is really key that you understand this, so we encourage you to go to the ATO website to review the criteria or again you can come to the CFS website and have a look there as well. So given the substantial rise in property prices, hopefully this is something a lot of our members weren't aware of and would perhaps through advice or looking at these resources find out a little bit more and we can help them on the way with that one.

00:24:44:09 - 00:25:16:08

 

Unknown

 

All right. These are just a few of the strategies we've just talked about three strategies or ways that members can contribute more to super. They’re actually hundreds of different strategies. Maybe that’s a little exaggeration, but there certainly are a lot of strategies that are available, and we have put some educational resources on our learning hub, on the CFS website, we encourage you to go and have a look at those short educational videos that talk about all the different types of ways that you can contribute to your super.

00:25:16:13 - 00:25:42:07

 

Unknown

 

There’s also tools, resources, articles and Kelly, you've already mentioned the calculators that we've got available there as well. Yeah. Look, I think that having awareness of those calculators, knowing where you can get more information is really important. One of the things I'm most passionate about when it comes to helping our members achieve their financial goals is helping them access that information, but also helping them access advice from a trusted professional.

00:25:42:08 - 00:26:06:24

 

Unknown

 

There are a lot of things that are, you know, nuanced and individual, and we've talked about some of those today that are specific to certain circumstances. So seeking advice, if you can, when you can is really important. Our research shows that seeking advice from a professional leads to a better financial outcome. There’s research to suggest that even getting assistance with your finances can help reduce any financial stress.

00:26:07:24 - 00:26:32:09

 

Unknown

 

And if any of our members out there are like me, a financial adviser can actually, you know, take the time to put things in place, stuff that I basically never get around to doing, like changing my investment options and sharing my beneficiary. Details are up to date. When I first saw my adviser helping me consolidate my super into one, working out how much I should and could contribute to super noting those caps that you were talking about.

00:26:33:01 - 00:26:59:06

 

Unknown

 

So with this in mind, last year CFS launched a new site to help our members connect with financial advisers. Many of you out there may already have an adviser these advisers can really help and they can help you, you know, look at the strategies and how they can apply to your individual financial needs and those of your family. Our website allows you to search for an adviser based on the type of services they offer, their qualifications, and in particular where they’re located,

00:26:59:06 - 00:27:23:03

 

Unknown

 

because I know a lot of people want to see an adviser face to face. Now we can do that again. Look, we've covered a lot of content in this webinar, so we've talked about the super gap, why it exists, and we've started to look at some simple ways that our members, our female members can actually start to address that gap as well as some strategies.

00:27:23:03 - 00:27:44:18

 

Unknown

 

And I love that last one, getting some good quality advice as well as really important. Yeah, so Jackie we've had some questions come in from our members and we’re going to have a go to the best of our ability of answering some of these questions today. The first question is coming from Karen, who has asked, I've been on maternity leave and now starting a small business and currently have no income.

00:27:45:02 - 00:28:10:22

 

Unknown

 

My husband works full time. What are some of the ways I can contribute to my super while not earning? Great question. And again, it’s great we’re able to help you with this one in terms of there is something called a spouse contribution option. And basically that means while you’re not earning an income, your partner or your spouse can actually make a contribution on your behalf directly into your super.

00:28:11:05 - 00:28:46:08

 

Unknown

 

There’s actually the added benefit as well that your spouse may be entitled to a tax offset. And this applies to people even on lower or modest incomes, less than $37,000. So that’s a great option to actually be able to put some money into super while you’re not earning. Once you start your own business and you start generating some income, then you can look at perhaps some of the other super strategies that we've discussed today or as I mentioned, you can find on our website as well. That’s great.

00:28:46:12 - 00:29:06:23

 

Unknown

 

We have another question here from Peter. I'm happy to take it. How much is really enough for a minimalist person to retire comfortably and look there, I get asked those questions all the time. How much do I need to retire? We talked about the ASFA comfortable retirement standard earlier, which has a particular amount. But look, it really it really differs.

00:29:06:23 - 00:29:33:09

 

Unknown

 

It depends on do you own your own home or are you renting? Are you in a couple? Do you have dependents? All that sort of stuff. And so I think the best thing to do is to direct you back to our website. There’s some great tools on ASIC’s MoneySmart website as well, but on our CFS website, our calculators that can help you work through things and give you options, I suppose in terms of the types of things you'd like to do in retirement so that you can determine how much you might need.

00:29:34:01 - 00:29:59:22

 

Unknown

 

I think another good point on that particular question also is whether you own your own home. Because the amount of money you’re going to need if you don't own your own home, you've got to obviously factor in rent into that equation as well. Okay. So we have another question here from Peter. How do I pay off my, should I pay off my mortgage first or put money into my super as the interest rate on my mortgage is high?

00:30:00:07 - 00:30:24:21

 

Unknown

 

It’s a tricky one. It is a very tricky one. Again, I as much as I would like to give you a definitive answer, it’s really not that black and white. It really is going to depend on your personal circumstances, what your tax rate is, what you’re paying on tax, whether super may be more effective. And again, what sort of home loan potentially you have as well with you on a fixed rate or variable rate.

00:30:25:05 - 00:30:48:20

 

Unknown

 

And Kelly mentioned the find an adviser site. I think that’s probably a question for a financial adviser to sit down and address. Yeah, look, I agree. I got asked this a lot during the pandemic. And I think, you know, paying off high interest debts is typically the first thing that you should do. I wouldn't put a mortgage into that, you know, that category, but credit cards and things like that before anything else.

00:30:48:20 - 00:31:12:17

 

Unknown

 

But then when you come to balancing out things like mortgage payments, and other types of investments and super, it really does come to your particular situation, it is important to seek professional advice in that case, I would suggest. Another question here from Eunice, and it is something that we touched on briefly in our update, but Eunice would like to know how she can change her super from static to increase returns. And static,

00:31:12:19 - 00:31:40:04

 

Unknown

 

I assume you’re meaning flat then they haven't been performing particularly well, which it which is interesting. And I'm wondering the last time you've checked in because probably up until the last few months, super’s actually some of the more growth orientated portfolios have actually been performing really well. So even if you hadn't been contributing to super, you should have seen some reasonable growth again depending on what portfolio that you've been invested in.

00:31:40:13 - 00:32:03:01

 

Unknown

 

Markets have been a little bit volatile of late. So they may have gone up or down. But the best way really to grow your super apart from investment earnings is making those additional contributions. And even if you’re not working, if you do have some savings you can do after tax contributions or personal contributions using after tax money to help grow your super balance.

00:32:03:16 - 00:32:29:24

 

Unknown

 

Kelly pointed out before, though, it’s also really worth checking in and seeing what portfolio you’re currently invested in because there are options that have the potential for greater returns over the longer term. Yeah, agree. Question here from Michelle. I have two super funds. What’s the best approach to choose one to merge the funds? Look, it’s hard without knowing the details of the funds in your circumstances to actually provide you with a view on that.

00:32:30:03 - 00:32:51:04

 

Unknown

 

I mean, I think the great thing, Michelle, is that you recognize that you have two super funds in the first instance. A lot of people don't appreciate that they have multiple super funds and in many cases, individual super funds have a dollar based fee. And so that would mean that you’re paying two lots of dollar based fees. So having one fund you know, in theory should be better.

00:32:51:14 - 00:33:16:09

 

Unknown

 

That said, really look into things like your insurance and your benefits before you move. There may be moving to one fund that doesn't have insurance or there may be particular circumstances relating to your health where it would be good to keep that fund that has the insurance. So one of the things that I would sort of recommend is if you are looking to consolidate your funds, you can go to the ATO website and I’ll give you some good comparisons.

00:33:16:09 - 00:33:44:16

 

Unknown

 

But do watch out in particular insurance. Yeah. So if you've got any health issues and you've got that insurance cover and you cancel it, you won't be able to get it back is essentially where you’re heading there. Also, look for any exit fees that may apply on the different superannuation policies. And Kelly mentioned through the myGov website, you can actually do some comparisons, but you can also consolidate your super there or you can do it through your super funds as well.

00:33:45:21 - 00:34:08:00

 

Unknown

 

Another one from Patty. I'm 62. How do I navigate transition to retirement and at what age can I. Can this be done? What age can I retire? Patty, great news. Age 60. You can retire. You can actually retire any age you like, but you can actually access your super once you reach preservation age. So once you’re over age 60, you’ll be able to access your super.

00:34:08:00 - 00:34:30:01

 

Unknown

 

So we actually have a lot of our members who are transitioning to retirement. That means they have still the option of putting money into super or drawing a partial income. Really depends on your circumstances, but if you've got enough saved up and ready to retire, the good news is at 62, you've got that option A question from Lisa.

00:34:30:08 - 00:34:54:10

 

Unknown

 

Widowed at 39 with two children who are primary age. I was a stay at home mom, super less than $80,000 and so sorry to hear about your loss and I think we you know super less than $80,000 and this is this is one of the key issues that we’re drawing awareness to today but because it’s so low I've invested in a high growth option as well as put in place a small salary sacrifice contribution.

00:34:54:18 - 00:35:18:24

 

Unknown

 

Any other ideas. I think you’re well on track Lisa like have you know if you think back to everything that we've been talking about today, just taking an awareness of your superannuation, knowing where it is, putting aside a small amount in the early start, the better. Even just, you know, even something like $5 a week will have a material impact when you hit retirement just because of those compounding returns in terms of your investment option.

00:35:19:16 - 00:35:50:07

 

Unknown

 

Look, you know, growth, high growth, you've got a while till you hit retirement so you can sort of afford to have that sort of you can manage through that volatility that we spoke about earlier. But again, more detail than that, I think. Speak to a financial adviser without having more particular information about your circumstances. I heard a couple of great tips from some fellow staff, younger staff members, I might say, when they were getting small pay rises rather than taking the pay rise, they'd actually put that into super or rounding up.

00:35:50:07 - 00:36:12:01

 

Unknown

 

So let’s say your income was a odd amount. Rounding, putting the difference into superannuation. So or as you said all those small amounts, they do actually do add up and the compounding effect on the earnings is great as well. Now and we might have just one more question and this one comes from Vicki. Self-employed.

00:36:12:01 - 00:36:32:04

 

Unknown

 

What’s the best way to boost for me as a sole trader? Actually I can speak to this one because my husband’s self-employed and for a number of years we haven't put any money into super because it’s not compulsory as a sole trader. But of course it’s great that you've recognized that, Vicki, because we've mentioned a few times the sooner you can get started,

00:36:32:04 - 00:36:58:16

 

Unknown

 

the less you have to put in later on, you can make personal contributions to super at any time, and you can do that with after tax money. So you can also claim a tax deduction along the way, which is what a lot of sole traders will actually do. So you have a choice. If you've put money into super in the last financial year, your super fund will actually ask you are you intending to claim a tax deduction for that contribution?

00:36:58:23 - 00:37:31:13

 

Unknown

 

If you are, that will the appropriate tax will be taken out if you decide to make it as an after tax contribution, then you will no tax will actually be taken out of that that amount. So there’s always options. There is a little bit of discipline as a sole trader, though, being able to put that money in because it’s not compulsory. Kelly, there are some great questions and I know we probably got many more and there will be an opportunity for our members to submit further questions and we will definitely come back and answer those where we can for you.

00:37:32:08 - 00:38:04:14

 

Unknown

 

I'd really like to thank you on behalf of Kelly and myself for attending today. And we really hope we've started a conversation because that’s what it’s about. It’s really starting the conversation about how you can address your super, close that gender super gap and actually get to that financial freedom or the retirement lifestyle that you want. At the end of the session, very shortly you receive a survey and we'd really love to hear your feedback what you'd like to hear more about and perhaps any future topics that you'd like us to cover.

00:38:05:03 - 00:38:27:14

 

Unknown

 

Kelly, you also mentioned earlier that we’re always here to help. We've got a number of ways you can reach out to us. Get in touch through our website, you can call our contact centre on 13 13 36 or please feel free to email us at contactus@cfs.com.au. Once again, thanks for joining us today. We look forward to seeing you next time.

INVESTING IN SUPER

Super helps you save for retirement, but it’s not like a savings account. While savings can grow through regular contributions and interest on your account, super grows differently. It grows not only through regular contributions, but by investing your money into a portfolio of assets, which may mean your balance can fluctuate over time.

By investing your super, your super fund works to generate returns from those assets to help increase the amount of savings you have when you reach retirement, making your super an investment in itself.

Wherever you stand on investments and super, we’re here to help you get to where you need to be. Click through for a more detailed explanation of how investing for super works.