Super & Insurance
Nine facts young women need to know about super
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Recently, a young graphic designer named Beverley told me, "When I go out to buy shoes, the nagging voice in my head says, 'this should be going in super".
"Should" is not going to motivate you, is it? Shoes represent far more instant gratification than super, they're a hit of happy for the feet and the ego. We already know we'd rather stick needles in our eyes than do "should". The shoes will always win with that frame of mind.
Rather, popping your money aside in a tax effective super fund is your future creative trip to France, it's your mosey around the food markets sampling ripe juicy fruit, drinking kir and watching the evening Passage. It's painting the landscape in vibrant oils, it's the apple tree in your holiday home yard.
It's not "super", or "should", it's the choices the money could create for you, sooner than you think.
Knowing the below fast facts about superannuation should help with the motivation required. They're provided here based on information from the Australian Tax Office.
- Super is a tax haven for your savings. Outside super, investments are usually taxed, but when nested inside a complying super scheme, they get some tax relief, which means they can grow faster. Less tax for the ATO means more in the pot for you. Like a greenhouse for tomato plants, super provides incubation and a degree of protection for your savings.
- Women can withdraw their super, tax free, from age 60.
- Combining all your super into the one account will save on fees, simplify tracking and allow you to make changes at the click of a button.
- By 2019, the average woman is expected to retire with around half the superannuation of men (and women tend to live longer than men).
- Your super doesn't have to suffer if you take time off work to raise children. Your working spouse can contribute on your behalf, you may both save on tax too.
- You can manage your own super investments if you feel so inclined, by setting up a self managed super fund. More about that in a later article.
- If you and your spouse separate, super is treated like any other asset accumulated during your relationship and can be divided by agreement or court order. You may get hit for tax though.
- Try MoneySmart for tips and calculators especially for women
- Your super fund statements are dull but essential. Read them. They represent your future.
I don't manage money for anyone except my family, nor do I give financial advice, and my opinions are my own unless stated otherwise. My writing should not be construed as general or personal advice. You should consider obtaining independent advice before making any financial decisions.