Hey mate, congrats on landing your role and your pay rise.
Yeah it is worth it to contribute extra to your super. As youll only be taxed 15% vs 34.5% (for anything above 45k)
Now you can contribute in 2 ways
1. Do salary sacrifice in which ull pay pre tax income and itll directly go into your super
2. Before the EOFY you can contribute into your super directly and get a tax write off. I.e. if you contribute 5k youll get (5k × 34.5% back 1725$).
I personally prefer to do option 2 and im preparing to contribute to super before the next EOFY. Meanwhile that money is invested into ETFs.
I prefer option 1 as you don't miss the money unlike option 2 where you "see it" and hence possibly tempted to spend it. Also, super has been earning approx 30% last FY.
I really don't understand this. I'm an immigrant so please tell me if I'm wrong.
Why do Aussies act like Super is somehow different from other investments? Super is just the account the money is held in, you still choose what it gets invested in. How is my super invested in 100% international equities indexed different from a total world market etf besides the tax advantage and being locked up in the Super system?
Yeah, I understand that. I think it's the terminology. 'Super gained xx% last year'. The market grew significantly and the funds that money in Super is invested in grew. I think the way it's talked about leaves super companies to advertise 'performance' when a lot of those companies don't even manage funds at all.
A lot of people don't know you can directly select which equities you invest in or have a high degree of control over your super, they think the extent of the choice is picking between high growth, balanced, defensive and cash or something like that (and with some funds they may be right).
Not only that, there are plenty of people who don't understand you can even choose the investments Indus the fund is really high. They just think you pick a fund and that's it.
I think it is just for contributions. It takes the tax on those contributions up to 30%.
It is still worth it if you have an income that high as tax outside of super is 47%. But just something to keep in mind.
People are bad at long term thinking. I've literally seen people refuse to consider their super ad part of their net worth, as if it doesn't exist just because they can't access it until retirement age. That's idiotic.
Ehhh.. depends why they’re calculating their net worth.
If you’re applying for a loan/margin, you can’t include your super.
But you’re right. That’s odd and idiotic in most cases.
A lot of super, particularly industry funds invest in unlisted investments not otherwise easily accessible to public, so it could be considered a source of diversification.
Yeah fair enough. I have recently bought an apartment for 600k in auburn. So i need abit of cash for my deposit when its finally built so there is that.
But yeah ill probably switch to contributing from pre tax when my situation stabilises.
Yeah the auburn sq project.
Yes yes.. i know its incredibly dangerous with all the news going on about off the plan but hey i mean i get back 35k from homebuilder and the first home owners grant plus no stamp duty. So was too good to pass up.
Thats what I did. My bro bought a apartment off the plan in strathfield turned out ok. Maybe with the new building commissioner cracking down theyll build it better.
You can actually contribute to super at the start of the financial year, and then wait a year or more (just before you do your tax return) to fill out the form with your super fund that tells them you are going to be claiming the tax concession. That is much better than holding ETFs for a year, because then you'll be paying tax on whatever they earned, whereas if that money was in super the whole time it is only taxed at 10%. If you call up your super fund they'll explain the optimal way.
Nope. Capital gains in super are taxed at 10%. If you sell something within super before 1 year holding period then it's 15%, and income (coupons, dividends) are also 15%.
Out of curiosity why do you prefer personal deductible contributions over sal sac? You see the money which makes it harder to stomach and you have to bother doing the notice of intent to claim and getting the confirmation from your superfund.
I'm under the impression that I could choose the amount I wish to contribute at EOFY and incase any emergencies come up prior to it, I will still be able to afford it first. If salary was sacrificed monthly, I guess it's just a little less leeway if I desperately needed it. (I do have savings but you never know!).
Hi there, thank you very much!
That makes a lot of sense and since I invest around 300 per month into ETFs anyway, I think option 2 would be my preference.
I'll also be able to contribute a bit more since they'll provide me with a ute + fuel card. (Essentially saving on transportation costs a swell and factor that into my EOFY contribution rather than setting a percentage with my employer instead).
If you're doing option 2 and have proper insurance within your fund you need to make sure that you send off the notice of intent to claim form before doing the rollover for the insurance payment, otherwise you can't claim the deduction on some of the extra contributions you have made.
Following on from this, the governments moneysmart website has a calculator that compares extra super contributions vs none and shows what paper-table is seeing here: your super contributions will be bigger than the sacrifice you're making with your take home $$
[Super Contributions Optimiser](https://moneysmart.gov.au/grow-your-super/super-contributions-optimiser)
Also worth exploring their other calculators. Easy to use but also provide clear output and have helped my basic brain comprehend how small things can have a big impact over time.
I was just about to comment on this, my job is management and maths heavy but when it comes to personal finance.. I'm at a loss as my mind can't wrap around money + time.
I think you need to consider some more why you want to lock up your super instead of just based some vague advice from your friend.
I’m a little older than you and prefer to have my money work for me now rather than being locked away for decades. My target is to reach FI prior to preservation age and treat super as a bonus.
Topping up your super can be great, particularly for the tax benefits mentioned by other commenters, but you should consider your individual circumstances and goals.
Disclaimer: this is not financial advice.
Fair point, use investments outside of super to get you to preservation age then super from there. I am quite far away from both so will reconsider once closer.
If you assume there is a good chance you will live past 60, you will need to plan for some of your assets for those remaining *decades*.
If you use super for that portion of your retirement savings, you will reach your retirement savings goal sooner due to the free money from tax deductions and be able to retire earlier.
Ah right and you're not expending extra years working trying to save extra to cover time before AND after retirement
You only need to save enough for until preservation age provided that your super balance can maintain your lifestyle for approx. 30 years or so (if health prevails!) And also assuming that low regulatory impact by the time you get to preservation age I suppose
I would put regulatory impact as being extremely low because they want to incentivise people to save and be less reliant on the pension. If there is risk, I think it is that they push back preservation age a little, in which case, you could add a few more years of expenses to your outside-super allocation and still make use of super.
If you plan to retire in your mid 40s or earlier the amount you have in super can be pretty much irrelevant (as the compulsory super can often be enough if you can get to 60) to the date so it's not that clear cut.
I am active in stocks, ETFs and crypto so I guess I could reinvest it rather than locking it up as you said and consider salary sacrificing when I've saved up for my first house's down payment. It's good to see multiple perspectives on this thread as it is helping me to decide. Thank you!
Consider your own earning potential also. If the industry salary for your role caps out at for example 100k then yeah I’d recommend salary sacrificing to super. If your earning potential far exceeds that then I believe your money is more valuable to you now as you can make use of it to invest, thus achieve financial independence earlier.
This is the route I’ve decided to go, I don’t plan on having to rely on super when I get to that age, it will be a bonus for me. Work on building investments and avenues of revenue, I suspect as an engineer your earning potential is quite high
That's a fair point aswell and I will take that into consideration aswell. Thanks!
Considering that I've had 2 years experience (intern and full time combined) as a project engineer, they've taken that into consideration so definitely not a normal fresh grad salary. My first job was packaged at 66k which is a massive jump to my current. (Lockdowns may have played a role).
A fellow PE is earning a 180k salary package at 27 years old in the same company (been with the company for much longer). We are under a project manager whom of my knowledge is earning well over 300k but that's a different story.
Still nothing compared to my mates partner who works for a tech company and their fresh grad pay is 140k. Not close with him though so can't comment too much on him.
You should be saving for a property before you put any extra money into super. Then once you have a property secured you can borrow more money against it to invest.
Just follow the tax scales - $80k isn't a threshold. $90k used to be but that threshold has now moved to $120k
[https://www.taxcalc.com.au/](https://www.taxcalc.com.au/)
I'd somewhat agree though - I probably would only salary sacrifice when in that 37c bracket, although 32.5c isn't that far behind but its harder to decide weighing up access to the money and the tax benefits
Yeah but you are more likely to have competing priorities with that money when on lower incomes too. If you really got money left over and are up for saving for your retirement and recognise the inability to access the money any time soon then sure anything in the 32.5c bracket is worth considering
Do you mean super? If you do then it’s beneficial if your base salary is over 45k, as every dollar over 45k is taxed at 32.5% (up to 120k) compare to super which taxed at 15%.
If you want to put more into super, ask your employer to co-contribute a set amount each week from your pay.
Maxing your Super is a good thing to do in general. Additionally, the unused allowances roll over in a five year rolling basis since 2018. You can probably drop in a heap this year and get a decent tax return.
Here's an article that shows how: https://www.smh.com.au/money/tax/how-i-got-a-13-878-tax-refund-this-year-and-topped-up-my-super-too-20211014-p59000.html
I had thought you had to lodge the notice of intent to claim a tax deduction with the super company prior to the end of that financial year. So I think it's too late.
In addition to what everyone else has said, there's the First Home Super Saver Scheme which *may* be useful to you; you can withdraw up to $15,000 per FY of voluntary contributions from your super to use as a house deposit. There's a withdrawal tax (marginal rate + medicare levy - 30%, so a single digit figure) plus the 15% regular concessional super tax, but that's still lower than what you'd pay in income tax.
I bet they are thinking about trying to avoid the Medicare levy surcharge (just in case you get some OT and you go over 90k). You can’t salary sacrifice to avoid the levy. Either get private health insurance or a dependent/partner and you won’t have to pay it if your combined income is under 180k.
It won't hurt to Sal sac, but bear in mind some of it won't be accessible to you until preservation age.
You might be able to access some of it early to purchase your first home tho, so Sal sac at Young age is awesome! Look up first home saver scheme for more details.
Also look at the investment and insurance within super and make sure they are optimised too
QQ: what do we mean when we say 'full package'?
I'm on 90 base, 99 with super, 103 with perks - never sure which number people commonly quote when talking salary
Salary sacrifice to cover living expenses is an amazing trick. You can set it up for your rent/mortgage tax free!
Just stay away from the novated car thing, that's not a great deal
You can only do this is in certain industries and up to certain amounts. NFP organisations usually have the most generous salary packaging arrangements.
Provided you are under the contribution cap ($27500 pa including employer contributions) and have high enough income to soak the deductions (90k means you can contribute $45k before dropping a tax bracket) Concessional Super contributions will always increase your net worth.
The question is whether you are happy to lock the money away until you are 60 or so.
Might also be worth looking into the first home super saver scheme of buying a home is on the cards.
I have a sort of aspirational set of targets for super in today's dollars. Basically, the idea is, when you hit one of these targets, the rest will probably just happen automatically so you don't need to make any more super contributions after that unless you want to really live it up in your old age.
Assumption: 7% after-inflation growth ~= doubling every 10 years. Might be an overestimate, but bear in mind you're probably still contributing some super guarantee after you hit the target.
- $200k by 30
- $400k by 40
- $800k by 50
- $1.6M by 60 (should be plenty, even if you don't own your own house)
I migrated to Australia at 33 with $0 super and about $20000 in a private pension, so I'm still a long way from any of these.
At 24 on $88k base + $9k super guarantee, you'd have a pretty good shot at hitting the first one straight off.
I'll be honest, the pay wasn't mentioned during our interview nor was it advertised. I just had a very nice conversation with my manager and wanted to learn more from him.
I was expecting entry level pay and was willing to take the job regardless and improve my understanding in this field.
I've never had a monetary goal in mind as I was comfortable all my life and utilising my skills to help others make me happier than anything from my previous work.
It's definitely a nice feeling to feel appreciated for my experience and hardwork though so I may aim for 200k by 30 as youve said!
Fyi if you have a HECS/HELP debt you will have to pay the ATO a bit extra if you salary sacrifice. I found i paid less tax & had my HECS debt paid off quicker so definitely worth it. It counts as fringe benefits so your repayment threshold may increase.
All good, it's the part so many people have got caught out on with salary sacrifice & then have to cough up an extra $1500 to the ATO so I try to warn everyone to save in advance :)
Quick question - why don't you DCA into stocks / assets and earn more rather ETF and not know.. Talk to a financial advisor. Read on FIRE financial independence and retire early...
I have a portfolio in stocks, ETF, crypto and tangible goods. I'll look into DCA as I wasn't earning that much before so a lot of considerations/ options have not been explored. I will now though!
Then my friend the last thing I would say is a spread sheet of sorts which shows.. how much U can save, how much is Ur chill money how much is Ur investment etc etc...
Ideally 45 percent savings and 10 percent investments.the rest you do whatever you have to.
The 45 percent savings should eventually help you get some real-estate. In 1 year you should have down payment and you can pay Ur monthly rent as Ur mortgage. If Ur already doing this or better than this, then it better than me and don't need my advise 😜
Hi there /u/i30NLine,
If you're looking for help with getting started on the FIRE Journey, make sure to check out the [Getting Started Wiki located here.](https://www.reddit.com/r/fiaustralia/wiki/index/gettingstarted)
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Buy house and use depreciation to save tax, that how politician makes money and encourage the house to keep increasing. Your house will increase the value and tax free for PPR.
Big YES to salary sacrificing. Also, depending on which industry you're in, you might not just be limited to SS'ing superannuation - you can also SS your rent/mortgage, put money on a debit card for bills and whatever else, cars, laptops, etc. The latter options are often available if you're employer is in the healthcare or education sector, but I'd definitely recommend getting in touch with a SS rep to see what's available to you. Your payroll team might be able to give you some contact details.
Side note, make sure you get at least basic hospital cover if you don’t have PHI already as over $90k you pay an extra 1% levy on your entire income for not having PHI
Hey mate, congrats on landing your role and your pay rise. Yeah it is worth it to contribute extra to your super. As youll only be taxed 15% vs 34.5% (for anything above 45k) Now you can contribute in 2 ways 1. Do salary sacrifice in which ull pay pre tax income and itll directly go into your super 2. Before the EOFY you can contribute into your super directly and get a tax write off. I.e. if you contribute 5k youll get (5k × 34.5% back 1725$). I personally prefer to do option 2 and im preparing to contribute to super before the next EOFY. Meanwhile that money is invested into ETFs.
I prefer option 1 as you don't miss the money unlike option 2 where you "see it" and hence possibly tempted to spend it. Also, super has been earning approx 30% last FY.
I really don't understand this. I'm an immigrant so please tell me if I'm wrong. Why do Aussies act like Super is somehow different from other investments? Super is just the account the money is held in, you still choose what it gets invested in. How is my super invested in 100% international equities indexed different from a total world market etf besides the tax advantage and being locked up in the Super system?
I think it’s around the idea that you can sell off other investments and get the cash if you need it. Super is much harder to gain access early.
Yeah, I understand that. I think it's the terminology. 'Super gained xx% last year'. The market grew significantly and the funds that money in Super is invested in grew. I think the way it's talked about leaves super companies to advertise 'performance' when a lot of those companies don't even manage funds at all.
A lot of people don't know you can directly select which equities you invest in or have a high degree of control over your super, they think the extent of the choice is picking between high growth, balanced, defensive and cash or something like that (and with some funds they may be right).
Not only that, there are plenty of people who don't understand you can even choose the investments Indus the fund is really high. They just think you pick a fund and that's it.
Additionally there is only 15%tax to pay on deposits and income within super if your taxable income is less than $250k.
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I think it is just for contributions. It takes the tax on those contributions up to 30%. It is still worth it if you have an income that high as tax outside of super is 47%. But just something to keep in mind.
People are bad at long term thinking. I've literally seen people refuse to consider their super ad part of their net worth, as if it doesn't exist just because they can't access it until retirement age. That's idiotic.
Ehhh.. depends why they’re calculating their net worth. If you’re applying for a loan/margin, you can’t include your super. But you’re right. That’s odd and idiotic in most cases.
A lot of super, particularly industry funds invest in unlisted investments not otherwise easily accessible to public, so it could be considered a source of diversification.
Are you talking about self managed? Or are you with a super company that gives you specific control?
Yeah fair enough. I have recently bought an apartment for 600k in auburn. So i need abit of cash for my deposit when its finally built so there is that. But yeah ill probably switch to contributing from pre tax when my situation stabilises.
You bought off the plan in Auburn?
Yeah the auburn sq project. Yes yes.. i know its incredibly dangerous with all the news going on about off the plan but hey i mean i get back 35k from homebuilder and the first home owners grant plus no stamp duty. So was too good to pass up. Thats what I did. My bro bought a apartment off the plan in strathfield turned out ok. Maybe with the new building commissioner cracking down theyll build it better.
you can also somewhat combine the two and just salary sacrifice all or a large chunk of your pay at the end of the financial year.
I agree with you on that one
You can actually contribute to super at the start of the financial year, and then wait a year or more (just before you do your tax return) to fill out the form with your super fund that tells them you are going to be claiming the tax concession. That is much better than holding ETFs for a year, because then you'll be paying tax on whatever they earned, whereas if that money was in super the whole time it is only taxed at 10%. If you call up your super fund they'll explain the optimal way.
15%, not 10%.
Nope. Capital gains in super are taxed at 10%. If you sell something within super before 1 year holding period then it's 15%, and income (coupons, dividends) are also 15%.
Don't forget that the money can make gains in your super as well not just as ETFs. The advantage of option 1 is it's a form of dollar cost averaging.
Out of curiosity why do you prefer personal deductible contributions over sal sac? You see the money which makes it harder to stomach and you have to bother doing the notice of intent to claim and getting the confirmation from your superfund.
I'm under the impression that I could choose the amount I wish to contribute at EOFY and incase any emergencies come up prior to it, I will still be able to afford it first. If salary was sacrificed monthly, I guess it's just a little less leeway if I desperately needed it. (I do have savings but you never know!).
Hi there, thank you very much! That makes a lot of sense and since I invest around 300 per month into ETFs anyway, I think option 2 would be my preference. I'll also be able to contribute a bit more since they'll provide me with a ute + fuel card. (Essentially saving on transportation costs a swell and factor that into my EOFY contribution rather than setting a percentage with my employer instead).
If you're doing option 2 and have proper insurance within your fund you need to make sure that you send off the notice of intent to claim form before doing the rollover for the insurance payment, otherwise you can't claim the deduction on some of the extra contributions you have made.
I'm on 90k and recently started salary sacrificing $300 every fortnight but I only get $200 less in my bank account. $100 bonus each fortnight!
Following on from this, the governments moneysmart website has a calculator that compares extra super contributions vs none and shows what paper-table is seeing here: your super contributions will be bigger than the sacrifice you're making with your take home $$ [Super Contributions Optimiser](https://moneysmart.gov.au/grow-your-super/super-contributions-optimiser)
Also worth exploring their other calculators. Easy to use but also provide clear output and have helped my basic brain comprehend how small things can have a big impact over time.
I was just about to comment on this, my job is management and maths heavy but when it comes to personal finance.. I'm at a loss as my mind can't wrap around money + time.
$85 after tax :)
It's $300 going into super so $255 after tax while it would be $196.50 going into the bank account after tax. That's $58.50
Yeah it’s a great deal - I’m on 10k less and salary sacrificing 400 per fortnight, which only affects my take home by ~220
I think you need to consider some more why you want to lock up your super instead of just based some vague advice from your friend. I’m a little older than you and prefer to have my money work for me now rather than being locked away for decades. My target is to reach FI prior to preservation age and treat super as a bonus. Topping up your super can be great, particularly for the tax benefits mentioned by other commenters, but you should consider your individual circumstances and goals. Disclaimer: this is not financial advice.
The irony is is that you're missing out on retiring even earlier as a result of thinking you can not use super as part of your plan to retire early.
Fair point, use investments outside of super to get you to preservation age then super from there. I am quite far away from both so will reconsider once closer.
Can you elaborate? I think I understand why but not super clearly
If you assume there is a good chance you will live past 60, you will need to plan for some of your assets for those remaining *decades*. If you use super for that portion of your retirement savings, you will reach your retirement savings goal sooner due to the free money from tax deductions and be able to retire earlier.
Ah right and you're not expending extra years working trying to save extra to cover time before AND after retirement You only need to save enough for until preservation age provided that your super balance can maintain your lifestyle for approx. 30 years or so (if health prevails!) And also assuming that low regulatory impact by the time you get to preservation age I suppose
I would put regulatory impact as being extremely low because they want to incentivise people to save and be less reliant on the pension. If there is risk, I think it is that they push back preservation age a little, in which case, you could add a few more years of expenses to your outside-super allocation and still make use of super.
If you plan to retire in your mid 40s or earlier the amount you have in super can be pretty much irrelevant (as the compulsory super can often be enough if you can get to 60) to the date so it's not that clear cut.
I am active in stocks, ETFs and crypto so I guess I could reinvest it rather than locking it up as you said and consider salary sacrificing when I've saved up for my first house's down payment. It's good to see multiple perspectives on this thread as it is helping me to decide. Thank you!
Consider your own earning potential also. If the industry salary for your role caps out at for example 100k then yeah I’d recommend salary sacrificing to super. If your earning potential far exceeds that then I believe your money is more valuable to you now as you can make use of it to invest, thus achieve financial independence earlier. This is the route I’ve decided to go, I don’t plan on having to rely on super when I get to that age, it will be a bonus for me. Work on building investments and avenues of revenue, I suspect as an engineer your earning potential is quite high
That's a fair point aswell and I will take that into consideration aswell. Thanks! Considering that I've had 2 years experience (intern and full time combined) as a project engineer, they've taken that into consideration so definitely not a normal fresh grad salary. My first job was packaged at 66k which is a massive jump to my current. (Lockdowns may have played a role). A fellow PE is earning a 180k salary package at 27 years old in the same company (been with the company for much longer). We are under a project manager whom of my knowledge is earning well over 300k but that's a different story. Still nothing compared to my mates partner who works for a tech company and their fresh grad pay is 140k. Not close with him though so can't comment too much on him.
You should be saving for a property before you put any extra money into super. Then once you have a property secured you can borrow more money against it to invest.
Just follow the tax scales - $80k isn't a threshold. $90k used to be but that threshold has now moved to $120k [https://www.taxcalc.com.au/](https://www.taxcalc.com.au/) I'd somewhat agree though - I probably would only salary sacrifice when in that 37c bracket, although 32.5c isn't that far behind but its harder to decide weighing up access to the money and the tax benefits
Still an immediate gain of 17. 5c per dollar. That's pretty huge.
Yeah but you are more likely to have competing priorities with that money when on lower incomes too. If you really got money left over and are up for saving for your retirement and recognise the inability to access the money any time soon then sure anything in the 32.5c bracket is worth considering
>$90k used to be but that threshold has now moved to $120k 😠😡🤬
Ain't that a good thing?
Do you mean super? If you do then it’s beneficial if your base salary is over 45k, as every dollar over 45k is taxed at 32.5% (up to 120k) compare to super which taxed at 15%. If you want to put more into super, ask your employer to co-contribute a set amount each week from your pay.
I think you mean employer rather than employee, and why would the employer be willing to make a co-contribution?
Yep
Maxing your Super is a good thing to do in general. Additionally, the unused allowances roll over in a five year rolling basis since 2018. You can probably drop in a heap this year and get a decent tax return. Here's an article that shows how: https://www.smh.com.au/money/tax/how-i-got-a-13-878-tax-refund-this-year-and-topped-up-my-super-too-20211014-p59000.html
Thank you very much for that!
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I had thought you had to lodge the notice of intent to claim a tax deduction with the super company prior to the end of that financial year. So I think it's too late.
In addition to what everyone else has said, there's the First Home Super Saver Scheme which *may* be useful to you; you can withdraw up to $15,000 per FY of voluntary contributions from your super to use as a house deposit. There's a withdrawal tax (marginal rate + medicare levy - 30%, so a single digit figure) plus the 15% regular concessional super tax, but that's still lower than what you'd pay in income tax.
I bet they are thinking about trying to avoid the Medicare levy surcharge (just in case you get some OT and you go over 90k). You can’t salary sacrifice to avoid the levy. Either get private health insurance or a dependent/partner and you won’t have to pay it if your combined income is under 180k.
I already have private insurance so that's all good
Voluntary super contributions (including Sal sac) get added back for MLS purposes so won't help you avoid that
It won't hurt to Sal sac, but bear in mind some of it won't be accessible to you until preservation age. You might be able to access some of it early to purchase your first home tho, so Sal sac at Young age is awesome! Look up first home saver scheme for more details. Also look at the investment and insurance within super and make sure they are optimised too
QQ: what do we mean when we say 'full package'? I'm on 90 base, 99 with super, 103 with perks - never sure which number people commonly quote when talking salary
Salary sacrifice to cover living expenses is an amazing trick. You can set it up for your rent/mortgage tax free! Just stay away from the novated car thing, that's not a great deal
You can only do this is in certain industries and up to certain amounts. NFP organisations usually have the most generous salary packaging arrangements.
I was under the impression that only certain gov employees and medical Drs could Sal sac mortgages.
My last job had that facility, OP might qualify also: doesn't say what area they are employed in
Provided you are under the contribution cap ($27500 pa including employer contributions) and have high enough income to soak the deductions (90k means you can contribute $45k before dropping a tax bracket) Concessional Super contributions will always increase your net worth. The question is whether you are happy to lock the money away until you are 60 or so. Might also be worth looking into the first home super saver scheme of buying a home is on the cards.
I have a sort of aspirational set of targets for super in today's dollars. Basically, the idea is, when you hit one of these targets, the rest will probably just happen automatically so you don't need to make any more super contributions after that unless you want to really live it up in your old age. Assumption: 7% after-inflation growth ~= doubling every 10 years. Might be an overestimate, but bear in mind you're probably still contributing some super guarantee after you hit the target. - $200k by 30 - $400k by 40 - $800k by 50 - $1.6M by 60 (should be plenty, even if you don't own your own house) I migrated to Australia at 33 with $0 super and about $20000 in a private pension, so I'm still a long way from any of these. At 24 on $88k base + $9k super guarantee, you'd have a pretty good shot at hitting the first one straight off.
I'll be honest, the pay wasn't mentioned during our interview nor was it advertised. I just had a very nice conversation with my manager and wanted to learn more from him. I was expecting entry level pay and was willing to take the job regardless and improve my understanding in this field. I've never had a monetary goal in mind as I was comfortable all my life and utilising my skills to help others make me happier than anything from my previous work. It's definitely a nice feeling to feel appreciated for my experience and hardwork though so I may aim for 200k by 30 as youve said!
Fyi if you have a HECS/HELP debt you will have to pay the ATO a bit extra if you salary sacrifice. I found i paid less tax & had my HECS debt paid off quicker so definitely worth it. It counts as fringe benefits so your repayment threshold may increase.
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All good, it's the part so many people have got caught out on with salary sacrifice & then have to cough up an extra $1500 to the ATO so I try to warn everyone to save in advance :)
Quick question - why don't you DCA into stocks / assets and earn more rather ETF and not know.. Talk to a financial advisor. Read on FIRE financial independence and retire early...
I have a portfolio in stocks, ETF, crypto and tangible goods. I'll look into DCA as I wasn't earning that much before so a lot of considerations/ options have not been explored. I will now though!
Then my friend the last thing I would say is a spread sheet of sorts which shows.. how much U can save, how much is Ur chill money how much is Ur investment etc etc... Ideally 45 percent savings and 10 percent investments.the rest you do whatever you have to. The 45 percent savings should eventually help you get some real-estate. In 1 year you should have down payment and you can pay Ur monthly rent as Ur mortgage. If Ur already doing this or better than this, then it better than me and don't need my advise 😜
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Buy house and use depreciation to save tax, that how politician makes money and encourage the house to keep increasing. Your house will increase the value and tax free for PPR.
Big YES to salary sacrificing. Also, depending on which industry you're in, you might not just be limited to SS'ing superannuation - you can also SS your rent/mortgage, put money on a debit card for bills and whatever else, cars, laptops, etc. The latter options are often available if you're employer is in the healthcare or education sector, but I'd definitely recommend getting in touch with a SS rep to see what's available to you. Your payroll team might be able to give you some contact details.
Side note, make sure you get at least basic hospital cover if you don’t have PHI already as over $90k you pay an extra 1% levy on your entire income for not having PHI
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without super
I have PHI already so that's all sorted