Welcome to the Friends with Money podcast, brought to you by Money Magazine, creating financial freedom for Australians since nineteen ninety nine.

Welcome to the Friends with Money podcast, brought to you by Money Magazine, creating financial freedom for Australians since nineteen ninety nine.

Hello and thanks for joining us for another episode of Friends with Money, money Magazine's podcast to help you earn, save, and achieve your financial goals. My name is Tom Watson, a senior journ us here at Money Magazine, and as always it is a pleasure to be with you. Today we are back on the topic of superannuation. I'm going to tackle one of the big issues in the space, the gender super gap. We know that women retire with significantly less super than men. The figure is very but ASPA has previously really started suggesting that the gap is around forty two percent for those aged between sixty and sixty four. Now, that's obviously a massive gap, and there are a few reasons for it. Women tend to earn lesser men, women tend to take more time out of the workforce for carrying responsibilities, and women tend to work part time more often. That's the reality of the situation at the moment. But here's the good news. There's no magic formula to close that gap, but that are smart strategies that individuals can employ. And it's really important to stress here that these aren't just for women. They're for anyone who is interested in giving their retirement savings a boost. So in today's episode, I'm very pleased to say that we're going to dive into the key steps that you can take in your twenties, your thirties, your forties and beyond to help set yourself up for a strong retirement and to help us along the way. Today, I'm very pleased to say that we are joined by two financial advisors from tels to Super Financial Planning, Rebecca Chievers and Sophie McCrae. Sophie, Rebecca, Welcome to Friends with Money.

Hello and thanks for joining us for another episode of Friends with Money, money Magazine's podcast to help you earn, save, and achieve your financial goals. My name is Tom Watson, a senior journ us here at Money Magazine, and as always it is a pleasure to be with you. Today we are back on the topic of superannuation. I'm going to tackle one of the big issues in the space, the gender super gap. We know that women retire with significantly less super than men. The figure is very but ASPA has previously really started suggesting that the gap is around forty two percent for those aged between sixty and sixty four. Now, that's obviously a massive gap, and there are a few reasons for it. Women tend to earn lesser men, women tend to take more time out of the workforce for carrying responsibilities, and women tend to work part time more often. That's the reality of the situation at the moment. But here's the good news. There's no magic formula to close that gap, but that are smart strategies that individuals can employ. And it's really important to stress here that these aren't just for women. They're for anyone who is interested in giving their retirement savings a boost. So in today's episode, I'm very pleased to say that we're going to dive into the key steps that you can take in your twenties, your thirties, your forties and beyond to help set yourself up for a strong retirement and to help us along the way. Today, I'm very pleased to say that we are joined by two financial advisors from tels to Super Financial Planning, Rebecca Chievers and Sophie McCrae. Sophie, Rebecca, Welcome to Friends with Money.

Thank you, Tom, Hello, Hi Tom, Thanks for having us.

Thank you, Tom, Hello, Hi Tom, Thanks for having us.

So, Rebecca, let's kick things off with people in their twenties. Clearly, this isn't an age where everyone is necessarily thinking a whole heap about their super and I know, at least from my experience, I wasn't, So why should they?

So, Rebecca, let's kick things off with people in their twenties. Clearly, this isn't an age where everyone is necessarily thinking a whole heap about their super and I know, at least from my experience, I wasn't, So why should they?

It's a really good question, Tom. It's because really, time is your big advantage. In your twenties, You're all about laying a strong foundation and even small actions can have a huge impact over the longer term. On your superbalance.

It's a really good question, Tom. It's because really, time is your big advantage. In your twenties, You're all about laying a strong foundation and even small actions can have a huge impact over the longer term. On your superbalance.

Yeah, that's an excellent point, and I guess it's something I wish I appreciate today a little bit more a little earlier on. So what are the I guess the key things that people in there are in their twenties should be focusing on that, Rebecca.

Yeah, that's an excellent point, and I guess it's something I wish I appreciate today a little bit more a little earlier on. So what are the I guess the key things that people in there are in their twenties should be focusing on that, Rebecca.

So there are some really basic fundamentals when it comes to super in your twenties. To begin with, it's really important to just have a look at your super. How many accounts do you have? Do you need multiple? Familiarize yourself with your super provider's website. Make sure you set up online access where you can check on your super and see what it's up to, how's it performing? Next, checked where your super is invested. If you are young, you generally have decades before retirement, which means you may benefit from being invested in a high growth investment option. Then other options that you could consider are things like salary sacrifice, so instead of getting all of your salary paid into your bank account, you can choose to have some of it before taps paid straight into your super. This strategy is the most effective for those earning over forty five thousand, as they may pay less tax by contributing into their super. It's always worth speaking to your employer about setting this up, or if you are self employed, then make these payments yourself. Obviously, if you can afford it, direct a portion of your next pay rise into SUPER.

So there are some really basic fundamentals when it comes to super in your twenties. To begin with, it's really important to just have a look at your super. How many accounts do you have? Do you need multiple? Familiarize yourself with your super provider's website. Make sure you set up online access where you can check on your super and see what it's up to, how's it performing? Next, checked where your super is invested. If you are young, you generally have decades before retirement, which means you may benefit from being invested in a high growth investment option. Then other options that you could consider are things like salary sacrifice, so instead of getting all of your salary paid into your bank account, you can choose to have some of it before taps paid straight into your super. This strategy is the most effective for those earning over forty five thousand, as they may pay less tax by contributing into their super. It's always worth speaking to your employer about setting this up, or if you are self employed, then make these payments yourself. Obviously, if you can afford it, direct a portion of your next pay rise into SUPER.

I love your point about our salary. Sacrificing their rebaccurates something outside doing a couple of years ago personally, and as you mentioned, I actually did it as well when I've got a pay rise and started dedicating her a little bit of that towards towards my SUPER. And I've definitely seen the difference over the last couple of years, so that's been really helpful. Before we move on, though, I want to ask you about insurance. So is this something that people in their twenties necessarily need.

I love your point about our salary. Sacrificing their rebaccurates something outside doing a couple of years ago personally, and as you mentioned, I actually did it as well when I've got a pay rise and started dedicating her a little bit of that towards towards my SUPER. And I've definitely seen the difference over the last couple of years, so that's been really helpful. Before we move on, though, I want to ask you about insurance. So is this something that people in their twenties necessarily need.

It's a really good question, Tom.

It's a really good question, Tom.

Many young people automatically have life insurance throughout their super or within their super, but depending on your situation, For example, if you don't have any dependents or major debts, you might not need it. So I'm a mother of a twenty one year old daughter, and she recently looked into her SUPER and decided that for this point in time, she really doesn't need it and has decided to cancel it. She's a full time student, she lives at home, and she's working part time, so it just didn't make any sense for her. So I would say it's worth reviewing, as the premiums that you pay can eat into the superbalance over the longer term.

Many young people automatically have life insurance throughout their super or within their super, but depending on your situation, For example, if you don't have any dependents or major debts, you might not need it. So I'm a mother of a twenty one year old daughter, and she recently looked into her SUPER and decided that for this point in time, she really doesn't need it and has decided to cancel it. She's a full time student, she lives at home, and she's working part time, so it just didn't make any sense for her. So I would say it's worth reviewing, as the premiums that you pay can eat into the superbalance over the longer term.

Okay, let's move up the age backroom now and have a chat about people in in their thirties and forties, possibly the greatest age, says the man comfortably in his mid thirties. This point, Sophie, what strategies are worth considering at the stage of life?

Okay, let's move up the age backroom now and have a chat about people in in their thirties and forties, possibly the greatest age, says the man comfortably in his mid thirties. This point, Sophie, what strategies are worth considering at the stage of life?

Thank you tom So. For the thirties and forties, it can be a time when financial pressures start to ramp up and life becomes more complicated with mortgages, perhaps starting a family, childcare costs, and as someone also in that age bracket, it's something that I can really relate to. And this is also when the gender super gap really starts to widen significantly. By their late thirties, women's superbalances are on average about twenty four percent lower than men's.

Thank you tom So. For the thirties and forties, it can be a time when financial pressures start to ramp up and life becomes more complicated with mortgages, perhaps starting a family, childcare costs, and as someone also in that age bracket, it's something that I can really relate to. And this is also when the gender super gap really starts to widen significantly. By their late thirties, women's superbalances are on average about twenty four percent lower than men's.

Wow.

Wow.

Yeah, and by their early forties that gap grows to thirty eight percent. So if you are taking time out of the workforce, something to consider is contribution splitting. This allows your partner who is still working, to transfer some of their pre tax super contributions into your account. This is particularly effective strategy where one partner is a high income earner. They can salary sacrifice into their super, reduce their income tax, and then transfer up to eighty five percent of their contributions into their partner's super account. And don't forget government incentives like the government co contribution. That's where for every post tax dollar contributed up to one thousand dollars, the government may contribute half. Again, that is fifty cents for every dollar. The other strategy I wanted to mention is spouse contributions. This is when a member of a couple can make an after tax contribution of up to three thousand dollars into their spouse is super and then receive a tax offset up to five hundred and forty dollars. Income eligibility of the receiving spouse do apply, so it's worthwhile doing more research there. As Rebecca also mentioned in the twenties, it can be just as important to review your superinvestment strategy in your thirties and forties to see if it still reflects your tolerance for risk and time frame to retirement.

Yeah, and by their early forties that gap grows to thirty eight percent. So if you are taking time out of the workforce, something to consider is contribution splitting. This allows your partner who is still working, to transfer some of their pre tax super contributions into your account. This is particularly effective strategy where one partner is a high income earner. They can salary sacrifice into their super, reduce their income tax, and then transfer up to eighty five percent of their contributions into their partner's super account. And don't forget government incentives like the government co contribution. That's where for every post tax dollar contributed up to one thousand dollars, the government may contribute half. Again, that is fifty cents for every dollar. The other strategy I wanted to mention is spouse contributions. This is when a member of a couple can make an after tax contribution of up to three thousand dollars into their spouse is super and then receive a tax offset up to five hundred and forty dollars. Income eligibility of the receiving spouse do apply, so it's worthwhile doing more research there. As Rebecca also mentioned in the twenties, it can be just as important to review your superinvestment strategy in your thirties and forties to see if it still reflects your tolerance for risk and time frame to retirement.

All right, let's move on and have a chat about people in their fifties. Then, this is obviously when a lot of people start paying serious attention to their super. So Rebecca, what are some strategies that people in this age group can employ?

All right, let's move on and have a chat about people in their fifties. Then, this is obviously when a lot of people start paying serious attention to their super. So Rebecca, what are some strategies that people in this age group can employ?

So I would say, first thing, Tom is, don't panic. Even if you feel like you're a little bit behind. There are plenty of ways that we can look at your situation and catch up. Firstly, fingers crossed the kids have left home, you might notice that as a result, you've got a little bit more disposable income and you can put that into your super. As outlined above, salary sacrifice is also worth taking advantage of. Another great strategy to consider is if your balance is under five hundred thousand, there is the option to use what we call catch up concessional contributions. This is where you can use any unused portion of your concessional cap from the last five years. This is great if you've had years where you couldn't contribute as much as you would have liked to, but now have some more financial flexibility. At this age as well, things can sometimes change. You may receive an inheritance or a financial windfall, and you could consider at this point making a non concessional contribution otherwise known as an after tax contribution. You're able to put in up to one hundred and twenty thousand dollars a year from your after tax income or lump some savings, or you can put up to three hundred and sixty thousand over a three year period using the available bring forward arrangements. It is, however, really important to ensure that you don't breach any of or exceed any of the superbalances or contribution caps.

So I would say, first thing, Tom is, don't panic. Even if you feel like you're a little bit behind. There are plenty of ways that we can look at your situation and catch up. Firstly, fingers crossed the kids have left home, you might notice that as a result, you've got a little bit more disposable income and you can put that into your super. As outlined above, salary sacrifice is also worth taking advantage of. Another great strategy to consider is if your balance is under five hundred thousand, there is the option to use what we call catch up concessional contributions. This is where you can use any unused portion of your concessional cap from the last five years. This is great if you've had years where you couldn't contribute as much as you would have liked to, but now have some more financial flexibility. At this age as well, things can sometimes change. You may receive an inheritance or a financial windfall, and you could consider at this point making a non concessional contribution otherwise known as an after tax contribution. You're able to put in up to one hundred and twenty thousand dollars a year from your after tax income or lump some savings, or you can put up to three hundred and sixty thousand over a three year period using the available bring forward arrangements. It is, however, really important to ensure that you don't breach any of or exceed any of the superbalances or contribution caps.

And one issue that might be more relevant for this age group is of going to be downsizing. And when we talk about downsizing, what we're talking about downside as in a home. So what's the deal here, Sophie.

And one issue that might be more relevant for this age group is of going to be downsizing. And when we talk about downsizing, what we're talking about downside as in a home. So what's the deal here, Sophie.

Yes, and it is a big topic, particularly for this age group, and there is a strategy that is becoming more popular known as downsizer contributions. So if you're over fifty five and sell your home, you can contribute up to three hundred thousand dollars per person from the sale proceeds into your superfund. This can be a great way to boost your balance and doesn't count towards the usual contribution cap limits, but there are rules around eligibility, so definitely seek advice before making a decision. This strategy is only offered as a once off scheme and the contribution needs to be made typically within ninety days of settlement.

Yes, and it is a big topic, particularly for this age group, and there is a strategy that is becoming more popular known as downsizer contributions. So if you're over fifty five and sell your home, you can contribute up to three hundred thousand dollars per person from the sale proceeds into your superfund. This can be a great way to boost your balance and doesn't count towards the usual contribution cap limits, but there are rules around eligibility, so definitely seek advice before making a decision. This strategy is only offered as a once off scheme and the contribution needs to be made typically within ninety days of settlement.

I always love a chat which includes a heap of practical tips, and I certainly feel like we've done that and more in today's episode, and I certainly hope that you feel the same way too. Deal listener, Sadly we have reached the end of our chat though, so Rebecca Sophie, thank you so much for coming on the show today. It's been and absolute pleasure talking with you both.

I always love a chat which includes a heap of practical tips, and I certainly feel like we've done that and more in today's episode, and I certainly hope that you feel the same way too. Deal listener, Sadly we have reached the end of our chat though, so Rebecca Sophie, thank you so much for coming on the show today. It's been and absolute pleasure talking with you both.

Thanks for having us Tom, Thank you, Tom, great to be with you.

Thanks for having us Tom, Thank you, Tom, great to be with you.

That's it for this episode of the Friends with Money Podcast. But don't forget to jump on our website moneymag dot com dot au for your daily dose of financial news. Or you can go grab yourself copy of the leader'stision of Money Magazine in all good newsagents. As always, Friends with Money will be right back in your podcast feeds next week, so until then, my name is Tom Watson.

That's it for this episode of the Friends with Money Podcast. But don't forget to jump on our website moneymag dot com dot au for your daily dose of financial news. Or you can go grab yourself copy of the leader'stision of Money Magazine in all good newsagents. As always, Friends with Money will be right back in your podcast feeds next week, so until then, my name is Tom Watson.

Goodbye for now, Thanks for listening to the Friends with Money podcast for credible independent and easy to understand financial commentary visit moneymag dot com dot au. Please remember that the views and opinions expressed in this podcast are general in nature and further independent advice and research based on your personal circumstances should be sought before making an investment decision

Goodbye for now, Thanks for listening to the Friends with Money podcast for credible independent and easy to understand financial commentary visit moneymag dot com dot au. Please remember that the views and opinions expressed in this podcast are general in nature and further independent advice and research based on your personal circumstances should be sought before making an investment decision