So after 2 and a half months of no job, I’ve finally got a new job. It’s not a great amount of hours yet, but it’s a start.
Because I had to take out my super back then to keep my alive, I thought I should contribute back more so I don’t have to suffer in the long run.
How much extra should I contribute to my super so I’m back to how I should be? I’m 31 y.o
So is that $200 a week plus what the employer takes out?
Well if you only put back in what your employer puts in, you won't get back to the position you were originally in. So yes it is in addition. But as another posted pointed out, make sure whatever amount you put in as extra is something you can afford based on your circumstances. No point going into debt trying to pay back your super.
Just need to be careful with the contribution caps if salary is around the $150k mark or greater.
Make sure you are sound financially before going nuts putting it back into your super.
Intelligent answer
No you shouldn't contribute any extra to your super. Save it for future emergency fund.
Wow thats easy neg vote for you by whoever. I agree with you. Don’t contribute just save for now for emergency because covid Pandemic might happen again and we all don’t know if gov’t will allow you to access your super again. Make sure you are financially stable before worrying about your super.
The only reason to contribute to super is to reduce your tax. If it’s not reducing your tax then it’s better to invest in other markets.
💯
One of these reports will let you compare with others in your tax bracket, age and gender
https://www.superannuation.asn.au/policy/reports (A snapshot of account balances in Australia)
E.g. the super median balance in 2017 for a male aged 30 - 34 in the $37,001 to $87,000 tax bracket was $41,780
That will let you compare to people in a similar position, though doesn't guarantee you will have enough for a comfortable retirement.
I would not contribute anything this financial year, wait till July, and wait till you are through the probation period of your new job. Then look at it again with your budget, and your salary at that time. If you still aren't getting many hours and your salary is low, you might be able to get a co-contribution. If you are getting a decent salary you can set it up to contribute and get a tax deduction.
On the contrary, if he contributes $10,000 or whatever he can it counts as a voluntary contribution and will reduce his tax. Given he's withdrawn it already (with no tax penalty) it's pretty much free money if he puts it back in.
I meant that isn't really contrary to what i said,
If you are getting a decent salary you can set it up to contribute and get a tax deduction.
so much as it is just repeating it….
Its also only useful if they are paying enough tax to benefit from a deduction
They said they are getting
not a great amount of hours
Which might make it better to aim for a co-contribution if their salary is low - which requires a non-concessional contribution (no tax deduction)
sorry was just replying where you wrote
I would not contribute anything this financial year
@Drakesy: I guess I should have spelt out more why not to do it this financial year other than still being on probation at the new job, and having not earned much money being out of work for months
People were only meant to access their super if they were in financial distress, not as a loophole to get a tax deduction. If they do claim a tax deduction that will raise red flags that and will be a great way to get audited.
ATO have been signalling this
https://www.linkedin.com/posts/australian-taxation-office_we…
If the person were truly eligible at the time they claimed it, there would be no penalty, but it will still suck to get audited.
Some great tips in this article from the ABC to help make the most of the government's co-contribution scheme:
https://mobile.abc.net.au/news/2020-06-05/australia-coronavi…
I wouldn't invest into super [unless it is to provide an immediate tax advantage*].
Super is putting away money for over three decades in your case (*and getting ZERO benefit today).
We have been taught (or brainwashed) to believe to invest in super because we need to have money when we are old and frail YET there is very little education to tell you to invest in yourself now, today and tomorrow.
Invest in yourself now so you do not need to rely on 'super', but more importantly invest in yourself now so you can gain freedom way before you get old and frail - and live the life on your own terms.
We have been taught (or brainwashed) to believe to invest in super because we need to have money when we are old and frail YET there is very little education to tell you to invest in yourself now, today and tomorrow.
Well people just don't learn about saving today for their old age, that is why they brought in super to stop people living from pay check to pay check then at an old age living pay check to pay check from the government.
If you have $300k at retirement the additional $10k a year to live off on top of the aged pension (if the government is not bankrupt by then) would make a big difference as the pension is $24k per year for singles and $36k for couple.
Invest in yourself now so you do not need to rely on 'super', but more importantly invest in yourself now so you can gain freedom way before you get old and frail - and live the life on your own terms.
Saving money is investing in yourself unless you're giving it to Ponzi Super Co. The alternative you are talking about is maybe further education to make $90k - $200k a year. I've seen people who make $200k a year basically living pay check to pay check. Not all people but a lot of people scale up their quantity (maybe quality) of life with the size of their pay check. I'd hate to be living a $200k lifestyle contributing 9.5% to super and end up at 65 and seeing the difference.
Suggest people look at this table regarding modest and comfortable incomes in retirement
Fair points, there isn't a one basket fit all approach.
I guess where I am trying to head is let's get smarter and be more intentional with our choices now, so that we can get more income sources whilst most of us are able to, before we get to retirement age.
There are so many investment and tax strategies out there (that ordinary folks like me) that can help us grow moving forward, so that we may not need to rely on government assistance or our superannuation at our older age.
…on top of the aged pension
The whole point of super is so that the government doesn't have to pay the aged pension anymore. By the time some of us retire, there will be no aged pension.
Assume there isn't an age pension. Count your lucky stars if there is.
Put your money into something that you can touch before you turn 300 years old.
Donot put it back as it will trigger ATO and you will be in their black list to take advantage of governement early super. You might be in black list.
I think you're right, great way to end up on a shortlist to get audited. ATO have been flagging this for months
https://www.linkedin.com/posts/australian-taxation-office_we…
If the person were truly eligible at the time they claimed it, they weren't taking advantage of a loophole for tax purposes, they may not end up with a penalty, but the experience of getting audited would still suck.
as much as you can afford
Use this to calculate
Note the aged pension is $24k for singles and $36k for couple. If you believe it still exists when you retire you need enough super to bridge the gap to provide a comfortable retirement.
My personal opinion. Invest in yourself / start a business / have a side hustle, try to making a $100k a year and put $25k towards super. Retire at 60 then travel until you're 70 then jump on the aged pension if it is still available. Broadly speaking.
How much extra should I contribute to my super so I’m back to how I should be?
What do you mean? By simple mathematics you should put back in the amount you took out plus/minus an adjustment for investment movements.
One could invest in stores of value now and slowly liquidate them later in life.
Woolworth's gift cards don't expire but a $1 today is not the same $1 in 30 years time and there is the risk that Woolworths will go bust.
Gift cards are not a store of value.
Make sure you pass probation first!
A quick calculation of how much you took out divided by how many weeks you can afford to pay that money back. Plus extra if you feel like it.
$10,000 / 50 weeks = $200 a week.