I'm trying to understand the amount of Super people should have compared to what they do.
How Much Super Should You Really Have at Age 40?
niagraBozO on 26/05/2021 - 18:50
Last edited 27/05/2021 - 12:19 by 1 other user
Last edited 27/05/2021 - 12:19 by 1 other user
Comments
Go to the Whirlpool forum. They all have super coming out of their ears!
Those 22 year olds are busy playing the stock market and taking that 400k from all of our super funds. Hell, most of them probably work for our super funds during they day, profit from them at night.
I am 22 with $400k approx in super. I believe this is a reasonable amount.
Weird flex but OK.
Whoosh
Seems legit
Depends on how much you have outside of super, and how long you anticipate working for.
E.g. some people want to retire early - e.g. early 40s or even in their 30s. Others are happy to work to 70+. Note if you want to retire early, you need assets outside of super until you can access it.
Irrelevant at age 40
Should be targeting an amount for Age 60
But also ensure you have other income producing investments outside Superannuation
So by age 40 you should have an investment property under your belt as an example
When I turned 40 in 1996 I had $97,345 in super.
That is super (pun intended) helpful in 2021.
That's a great effort considering super only started in '92 and was 4% IIRC. What industry were you in?
I was a computer programmer. I moved to Sydney in 1993 and had $15,821 in my Aussie fund. I had the equivalent of $81,524 in a UK fund which I transferred to Australia in 2006. I had salary-sacrificed into both.
Ah nice, back when IT paid well across the board.
Super was compulsory in 1992 not that it started . There were retirement funds before that time which rolled into super
Compulsory super (aka the Superannuation Guarantee) started in 1992. Superannuation schemes were available to some workers for decades prior.
In 1973 the Whitlam Government established the National Superannuation Committee of Inquiry, and the following year the Australian
Bureau of Statistics conducted the first national survey of superannuation. This study found: Only 32% of the workforce was covered by superannuation.
My retirement plan is to find a rich ageing lady and be a boy toy for a few years.
… rich ageing lady…
are there ones that don't age? 🤔
For a moment I read it as lady boy 😳😂
Demi is back on the Market, but are you a underwear model like her last ex.
If you can live long enough, you'll probably be the only guy on the block !!!! Gotta like them odds
The amount you have and the amount you might find "comfortable" is all relative to what your used to earning and spending. It's an individual thing.
I'm 40 and have a total of about $250K combined. I haven't put in any extra above the compulsory contributions at all, but in about 10 years time, I might need to reassess and take advantage of any additional tax benefits there are once I've paid off my mortgage, etc.
Those that have been on high salaries their whole life are probably used to spending bigger amounts on more expensive things, so what someone else finds to be "comfortable" to retire on isn't necessarily going to be enough for someone in that position.
Expenses during retirement are generally less than current though. It's expected that most people have their mortgage paid off prior to retirement. That's probably the biggest expenses for most people during working life. And, of course, people aren't raising children during their retirement years.
I’m in my mid 30s and I’ve got just a smidge under 300k in super
My dad came to Australia at age 40. Retired at age 60 with a touch over 1mill in super but he made voluntary contributions consistently. He maxed out the voluntary contributions once he paid off his house
Let's assume your super returns 7% per year (If you didn't contribute any more money - your super will double every 10 years)
At age 40 - let's say you only have 20 years left of working life (i.e. let's aim to retire at 60). This is 240 months.
Let's work out the equation for a couple -> the moneysmart link in the first post indicates $640K in today's value is a good lump sum to retire on comfortably as a couple.
Using some P&I high-school math
Pend = Pstart + (R + (1+0.07/12)R + (1+0.07/12)^2R + …. (1+0.07/12)^(N-1)*R)
where Pend is end amount of $640K, and R is your monthly contribution from work (assuming no pay rises), and N is 20*12 months.
Rearranging the equation:
Pstart = Pend - (R + (1+0.07/12)R + (1+0.07/12)^2R + …. (1+0.07/12)^(N-1)R)
= 640,000 - (R + (1+0.07/12)R + (1+0.07/12)^2R + …. (1+0.07/12)^(N-1)R) <—- factorising R out
= 640,000 - R(1 + (1+0.07/12) + (1+0.07/12)^2 + …. (1+0.07/12)^(N-1))) <—- this is a geometric progression (see wiki) -> Sum = a(r^n - 1) / (r - 1) , a = 1
= 640,000 - R*((1+0.07/12)^239 - 1) / (0.07/12))Does anyone else here want to check my math?
Unfortunately looking at the equation, if my math is right, working backwards it means a person who earns less, will need to have a higher starting principal at age 40 to achieve the $640K goal).
10100001001010100010100
Check my math? My math?
You're forgetting tax
I think he forgot the "s"
Good point - I also figured out that I forgot about inflation -> if we roughly assume money value halves every 20 years, then you'd want $1.28M at the end.
Someone also made a good point below about $640K includes part pension -> I guess perhaps we'd can change Pend to a different value later.
I'm not sure how many people want to still work at 67, but again - we can change N. I'll keep it at 60 (240 months) until I can figure out the tax part first….If its 15% on salary contribution & 15% on all earnings then I think the equation changes to:
Pstart = Pend - (0.85R + (1 + 0.850.07/12)R …. )
= Pend - (0.85R + (1 + 0.850.07/12)R …. ) + 0.15R - 0.15R (slight hack to make the geometric progression equation easier)
= Pend - R(1 + 1.0049583 + 1.0049583^2 + …) + 0.15R
= Pend - R(1.0049583^239 - 1)/(0.0049583) + 0.15R
= 1280000 - R*((1.0049583^239 - 1)/(0.0049583) - 0.15)… let's sanity check this, so if, as a couple, we contribute $1500 per month to our super, and super does a 7% performance p.a & we want to have $1.28M in super in 20 years….
Pstart = 1280000 - 1500*((1.0049583^239 - 1)/(0.0049583) - 0.15) <—— copying and pasting into google gives….
= 596,150Well, either I've made a mistake, or I'm fairly far behind :D - but if I include my investments outside of super - I'm on the right track (if they have at least a 7% pa return - hopefully higher enough to cancel out the extra tax)
If I bump it to a 9%pa rate of return by super, then I just tweak the '0.07' in my equation above to '0.09'… and the equation becomes:
= 1280000 - 1500*((1.006375^239 - 1)/(0.006375) - 0.15)
= 441,003I just realised I also haven't included fees charged by the super company (damn)
Just for arguments sake if I increase the repayments to $2000 with 9%p.a. return, the value becomes
= 1280000 - 2000*((1.006375^239 - 1)/(0.006375) - 0.15)
= 161,338The equation is only an estimation - and it's not a perfect model (i.e. I chose 1.28M to cater for inflation, but ignored payrises over 20 years).
If anyone is keen I can try and see if I can adjust that too (but not now… it's Sat)Rather than trying to come up with an analytical solution in a textbox -> it's probably easier just to setup the formulas in excel for a months calculation and just drag the formula down the number of rows to match the number of months you want calculated.
What's your salary assumption?
@postform: (I realised my equation in my 2nd reply is wrong - please disregard - See bottom of this reply for correction as I can't edit my previous post anymore)
For salary estimate - it's implied by the repayment amount -> R. $1500
You can set it to whatever it says on your payslip (pre-tax amount - adjusted to monthly amount) e.g. if you are like me and putting the absolute minimum into super.
If you have a higher salary, then your R increases with it.I guess naively $1500/month would be 9.5% -> so 100% implies a couple earning ~$190,000K/year total (I've never looked at my payslip to care about how super is calculated to be honest).
Just realised I've made a mistake in my equation when I tried to 'cater for tax' - the 15% tax should apply on the repayment.
So the equation is stupidly simple and resembles my first post with an extra 0.85 scaling factor on R. (I can't edit the post anymore, so showing the correction below)If you can work out the post-tax monthly super contribution, then the equation in my first reply is the theoretically correct one:
Pstart = Pend - R[1 + (1 + I /12) + (1 + I /12)^2 …. ]
= 1280000 - R[ ((1 + I /12) ^239 - 1) / ( I / 12) ]If you have the pre tax amount - simply multiply it by 0.85 to get your post-tax monthly amount and use the equation above.
For 9% - I is 0.09, assuming pre-tax contribution of couple is $1500 - post tax it is 0.85 * $1500 - so R = 1275
Pstart = Pend - R[1 + (1 + 0.09 /12) + (1 + 0.09 /12)^2 …. ]
= 1280000 - 1275[ ((1.0075) ^239 - 1) / (0.0075) ]
= 436,048I'll emphasise, there are a lot of assumptions here that make it more likely to overestimate things (but better to overestimate than underestimate). Assumptions below:
- You don't get payrises over the next 20 years nor promotions with extra pay (For most, this is unlikely - and causes most of the overestimation)
- Your super gets you 9% pa return consistently (Some supers do better than this on average, some don't)
- You don't co-contribute past the minimum amount. (You may choose to co-contribute because super is your ONLY retirement strategy and you want to de-risk)
- $1,280,000 is a reasonable estimate of a target Pend in 20 years (It may not be, I think it comes from an assumption inflation is 3.5% p.a. - Naively calculating (1.035)^20 gives me 1.98 - i.e. almost double. I've heard people say the value of a dollar halves every 20 years)At the end of the day - this is a model. It's a tool to 'guess' what where your super might be in 20 years, and whether or not you wish to take action to reduce risk.
Obviously please see a financial adviser if you need further guidance on your own personal situation.
This is a free equation to help get people start objectively thinking about their futures, and hopefully motivate people into self-study & improve their own personal finance skills (i.e. to help detect BS / mistakes / over-generalizations).Word of warning - this may be a case of you get what you pay for :D. I don't do this for a living.
Corrected Equations
** Something didn't feel right this morning and I thought about it again. I haven't applied interest on the Pstart amount so the ABOVE CALCS ARE WRONG.**
Pend = Pstart(1+I/12)^N + (R + (1+I/12)R + (1+I/12)^2R + …. (1+I/12)^(N-1)*R)
….Pstart = (Pend - R[1 + (1 + I /12) + (1 + I /12)^2 …. ]) / [(1 + I/12)^240]
For 9% - I is 0.09, assuming pre-tax contribution of couple is $1500 - post tax it is 0.85 * $1500 - so R = 1275
Pstart = (1280000 - 1275[ ((1.0075) ^239 - 1) / (0.0075) ]) / (1.0075)^240
= $72,564So let's try some more conservative values 7% return p.a. and your income as a family unit only gives you $750 per month pre tax contribution (Total Salary ~$95K), so post tax contribution should be 0.85 * 750 = 640
Pstart = (1280000 - 640[ ((1.00583) ^239 - 1) / (0.00583) ]) / (1.00583)^240
= $235,244If you wanted to end up with $2M at the end in the next 20 years with same R of $650pm (maybe because we won't have pension), the estimation would be:
Pstart = (2000000 - 640[ ((1.00583) ^239 - 1) / (0.00583) ]) / (1.00583)^240
= $413,660Forgive me, high school was 15 years ago.
working backwards it means a person who earns less, will need to have a higher starting principal at age 40 to achieve the $640K goal).
Don't think you need any equations to reach that conclusion.
Thatsthejoke.jpg
Merely an objective observation looking at the equation :D - but yes could easily be inferred by anyone with good logical reasoning.
The way the government talks about the minimum contribution amount - it sounds like it'll make everyone's life easy at the end - when it really won't.
Thus back the OP's original question -> the answer depends on how much they contribute & at what point in time.
I'm trying to engineer the equations openly to get a more accurate model, and hopefully clarify the assumptions made along the way.(As opposed to some random comment from a stranger - "You don't know me, but take my word for it….. $XXX K , that's what I was told by someone who knows my financial situation fairly well, but not yours")
The moneysmart $640K figure factors in part pension which implies you need to be 67. So 20 years of working life should be 27 years of working life in your 'equations'.
Ah good point - You could play with Pend and N in the equation above to suit your preferences.
Having been thru the retirement thing, after being made redundant in my late 40s, I can tell you…
You either need lots of super or don't bother with it at all.
Why? The first few hundred thousand simply reduces benefits you would otherwise get from Centrelink. Only once you hit around the half million mark will you actually be any better off for all your Super savings. And you'll go backwards with CPI every year in any respect… Every year, the bureau of stats will give a rubbish CPI figure that bears no relationship to how much less you can buy with your retirement money.
So, as Yoda would say, do or do not, there is no try. Have heaps, or don't bother. It's a trick by the government against most people.Sitting around $320k at 36. I actually think I may have gone a little overboard as leaving it now and assuming it doubles every 10 years, i should have around 2.5mill when I'm 66. It's a great tax break and all but i'd probably be better focusing on things like managed funds etc, then retiring earlier at like 50 or 55. Or dropping down to part time hours, to enjoy life a little more.
Solid effort
I dunno why he (she?) was downvoted… I'm at that amount, but I'm 42. Haven't added any extra contributions, but I've almost paid the mortgage off (about 7 months to go) then I'll start boosting super but also focusing on other investments. I have the same plan, dropping down to part time hours at 50-ish! There's no way I want to work my ass off till I'm 67!
I think there is a tax dis-incentive to have more than $1.6million in super per person.
Yup. not sure why the negative vote.
I live a sensible lifestyle and have avoided splashing out on unnecessary things like expensive clothes, expensive cars, etc, and instead investing in super and managed funds. Anyone can do it on a reasonable salary.
When explaining compound interest to people I always use the example of buying an 80 grand car, versus investing. After 7 years an 80 grand car is worth probably 30 grand. Investing the same into a higher risk high-growth managed fund like vanguard would double your money in 7 years at 10% pa. So after 7 years, you are likely to have 160k in a managed fund, versus a car worth 30 grand. A $130k difference. Now I know that example is extreme and we need to buy a car, but do you really need an 80k one versus a 30k one? Probably not, and investing the additional money into a growing asset instead of a depreciating asset will slowly year by year get you ahead.
Who says you'll even make it?
23% die before retirement (so nearly 1 in 4 people won't get there) another 10% will only make it 5 years past retirement and if you're lucky you'll hit average life expectancy (13 years after retirement) but by then half of all your friends will have died. The average life expectancy also lines up with the average age of people entering aged care homes. So your expenses are likely to be cut anyway. 10 years later you'll have survived more than 70% of your peers. So it's unlikely any of your friends will be alive if you've made it that far.
But to answer your question I've got around $91k in super at 37 but have a house paid off and am paying another one off now. My super provider sent me an email only last week which said I have more than the average person in my age bracket (at $85k).
So your saving super for a 67% chance you'll make it and live at least 5 years past retirement. That's better than a flip of a coin so why wouldn't you? 2 out of 3 time it will be worth it, why bet on the 1 time it isn't. That's not even logical!
That’s only a 1/16 chance both you and your spouse/partner will die before retirement. Even if that happened, the money would go to your kids.
For a little extra $ that most people won’t miss, it’s a tax effective saving vehicle. Most people wouldn’t match the returns year-in year-out if they tried Stockmarket investing themselves.
Maximise your super, pay off your primary residence as fast as possible, and leverage an investment property for the capital growth and negative gearing.
I have zero friends now.
If half of my friends will be dead by the time I’m in my 70’s, how many friends would I have?
Ozbargain is your friend. Ozbargain is immortal.
https://www.abc.net.au/news/2014-09-09/clive-palmer-wrong-su…
More than 89 per cent of people are expected live beyond the age of 65, and the age at which a person can access their super is significantly lower.
Some of Australia's largest super funds confirmed that less than 5 per cent of funds are paid directly to beneficiaries because the member has died.
A mate of mine is a financial adviser, and he tells his clients that if they've got $200k in superannuation at age 40, it'll largely take care of itself from there.
I'm 38 with around $150k, so am doing some salary sacrificing to get there.
And yes, 40 is an arbitrary checkpoint and personal circumstances and needs vary. But due to the very favourable tax treatment of superannuation and also the miracle of compound interest, a checkpoint like this can help to focus your mind and get you doing yourself a really big favour.
I have 0 in super, but what I lack in numbers I make up for in hope that one day stakeholders will offer me a 6 figure salary.
Bout one fiddy
i have 206K at 37.
I get co-contribution (government) with ESSS. Usually contribute max to get co-cont max as well.
I have currently set it to min contribution (3.6%) to make 1 wage (wife on mat leave) a bit easier.I don't know if this is 'good', but it seems okay to me :|.
If i maintain putting my minimum in (i wont)… i can retire at 60 with about $540k.
I usually run 7% +co-cont.
First a boring but necessary disclaimer: I'm not a financial planner, just a regular bloke with a regular job.
Some loose calcs to illustrate a useful point:
Let's assume you are taxed at 32.5c in the dollar.
You are 40 and you have a choice do I put $1 in super or invest it.
Now if you invest it:
INVESTMENT: $1 investment, 7% p.a. return, 20 years = 1.07^20 = $3.87 at the end. Congrats - you now have 3.87x what you started with!And if you put into super:
$1 into super that you declare as concessional.
The tax man takes 15c from that contribution so you now have 85c in super. But the tax man gives you instead a tax refund into your bank account of 32.5c which you decide to invest.
So now you have:
SUPER: 85c investment, 7% p.a. return, 20 years = .85 * (1.07^20) = $3.29 at the end in super
INVESTMENT: 32.5c investment outside of super, 32.5c, 7% p.a. return, 20 years = 0.325*(1.07^20) = $1.258 worth of investment
At very end you end with $3.29+1.258 = $4.548 - which is a good 17.5% more than if you would have purely invested it.But there is a price to pay for getting that extra 17.5% 'free' return: your money is locked away.
But for some that is a good thing - it is passive investment at it's finest - managed by others and locked away with no fear of yourself micro managing/panic buying or selling.And this also shows why putting in now as much as you can makes sense - every dollar you put in now will likely triple by retirement, and in addition to that you get a substantial kickback from the govt you can then choose to re-invest back into super or elsewhere, further lessening the contribution 'pain'.
In general, if you are on border line, just contribute your concessional cap.
The case for making contributions beyond the concessional cap is much harder to make (except if you have self-doubt as to the resilience of your investment decisions, which truth be told we should all have to some extent)Wise words sir
My only gripe being as others have mentioned… Will I ever make it to that age? Let alone the quality of life and the enjoyment of that money would surely be lesser then that I can enjoy while I'm young. Something I can never make a solid decision on
I guess you could consider it from the other side - what if you DO make it to that age? If you haven't planned for your retirement, your lifestyle will be constrained by your limited assets and the gov't pension - painful if you had been used to a less frugal lifestyle.
Correct me if I'm wrong but the way I see it is that $1 that you're investing out of your pocket has already been taxed at your normal income rate before you have access to it so it was possibly say $1.40-1.50 before tax depending on your tax bracket. You will also likely pay capital gains tax on the investment when you want to realize the profits.
If you salary sacrifice and put that same $1.40 in to super pre-tax, it is taxed at the lower 15% rate, you already have 19% more to start with? Compounded over 20 years is a much bigger difference.
Also I believe your calculations are off, that's not the correct formula for compounding interest.
Whitelie:
- re pre/post tax I presented from standpoint of the $1 after tax that you have in your hand now. Salary sacrifice into super as in your example results in same amount if in my above example you put what the tax man gives back to u back into super (i.e. .85+32.5)
- I believe my compound interest formula is right, feel free to correct me
- re CGT you are right if you talking about shares. That $1 in reality could eg be into your home loan account, or to buy your principle place of residence etc etc (or even in shares where u have a big prior loss to offset) that are all CGT free.
Most people are (presently) going to receive at least a part-pension at some stage, so you also need to factor in the reduction in pension component as retirement balance increases.
Net worth more important. Smaller super but more home equity or investments can be just as good or better depending on how long you intend to live.
Agree
Super is only good for those who don't know how to invest by themselves. Why wait til you're 65 to be able to access it, when you can invest it out of super and enjoy the benefits as you are still living.
What about for spending after 65?
You should do both
'Super is only good for those who don't know how to invest by themselves' ?
that sounds wanktasticly self-congratulatory
but ignores the tax benefits of concessional contributions
when I was working with 37% marginal income tax rate, contributing to super at 15% tax was like getting 22% free money or starting with 122% compared to after-tax investments
pretty damn good when you then got say 10-15%pa on that
let's say I got 16%pa on an investment property (I did) from my after-tax cash
compared with 8% on my super since Feb'2020 (pre-crash)
8% on 122% looks like about 32% growth - twice as good as 16% on my after-tax cash investment.
Given their recent history, it may not be a good idea to listen to AMP, but this article is quite useful because it tell you what the average super balance is for someone your age.
If you're 40 to 44 years old and male $135k. If female $98.5k
my readings suggest most people with kids don't start to be able to save significant amounts until they are empty nesters after the kids have grown up, gone to uni and left home, got jobs and started paying for themselves.
if you are in a steady federal public service type job with good super with maybe defined benefit guaranteed income stuff then great that will be proportional to your time in the pub serv.
for most people in and out of patchy variable work, they may have far call super - especially 'independent contractors' like food delivery bicycle riders scrabbling to make $10 an hour now.
my experience was on low entry-level jobs I couldn't save anything - but as soon as got a promotion to a higher pay level, suddenly I could save ! The last few years of my highest pay before retirement was like money for jam - hitting tax concessional contribution limits.
so as others said, it depends entirely on your job situation/stability, pay level and ongoing expenses like kids
There is a scare campaign currently being undertaken by the govt attempting to paint this ideal life style of you gayly being a multi millionaire, sipping pina-coladas upon you 40' yacht.
They further enhance this image by presenting the "pension" as your bogeyman - you living in miserable abject poverty.Just let life roll along. Be grateful we live in a lucky country where the pension is actually quite generous, and health system is A1.
You can live quite comfortable upon the pension… the govt just don't want to encourage it.
I would describe my personal health as a C minus. How do I get to A1 status?
I think the biggest determining factor of "how much" super you need will be whether you own your house, and whether it is paid off. Having no house payments frees up a lot of your cash to out elsewhere.
Next up would be whether it is a full or partial retirement, meaning are you simply moving from full time work to part time (still keeping your income) or whether you are cutting off your income entirely.
So basically I don't think there is a proper answer. If you're paranoid, save up as much as you can.
I know it's not overly useful, but here is the last 10years of my super balance, which I think really helps show the power of compound interested (as well as making personal contributions).
I'm currently 37 and salary sacrifice around 3% of my monthly pay into super. I invest in an index balanced option, where the fees are 0.02%
- Jun-10 29,858
- Jun-11 40,343
- Jun-12 50,520
- Jun-13 71,709
- Jun-14 96,060
- Jun-15 127,693
- Jun-16 136,798
- Jun-17 167,527
- Jun-18 198,255
- Jun-19 221,000
- Jun-20 248,000
- Jun-21 310,000 - Projected
I'm sitting around the same balance at a similar age.
With that balance, all you need to do now is sit back and it'll grow into an amount more than capable of retiring on. You could actually drop your pre-tax salary sacrifice now and be fine at retirement, but it's a good vehicle to minimise tax and if you want to retire early, then you can also access your super tax-free to draw down (from 60).
the pollies get 15+% super on their income. The libs want to lower/get rid of it for others but not themselves. This speaks volumes as to how good super is. Pay in now to pay it forward.
Qsuper provides this table:
https://qsuper.qld.gov.au/super/how-much-super-should-i-have.
A 40 yo expected to have 154KI'm 37 and have ~$260k in super. I'm putting a little bit extra ($245 pre tax) per fornight. My wife doesn't have anywhere near that though, maybe $80k. So together we would average ~$170ish each.
By age 40, I think it is going to depend how much you owe on your house - because when you've paid that off you can easily put more into super.
I think 400kish for a couple or 250kish for a single person is a good amount by age 67 + a house. Why? These numbers are approx the max you can have before the age pension gets reduced.
If as a couple you get the age pension + use 15k/year from your super as a couple to subsidise your income (equiv to $300/week on top of the pension) you can live what is in my opinion a comfortable lifestyle, including doing a fair bit of travel, leisure spending etc.. considering no mortgage to pay.
I think the average person overestimates how much they need, however it depends also on lifestyle expectations.
Stuff Super lol.
My mates in Sydney all have parents with houses. Guess where the assets are going after the parents kick the bucket.
That's good for your mates, there will probably be an inheritance tax in the long run like in many countries.
There are no inheritance or estate taxes in Australia.
Capital gains tax (CGT) applies to the disposal of an asset.
None at the moment, but in the long run it is plausible. The idea is often discussed/floated in the media.
https://www.macrobusiness.com.au/2021/05/why-now-is-the-idea…
@acersaurus: The idea is discussed at election time to scare liberal voters (and everyone else including labor voters) from voting labor.
What if the parents wise up and sell their houses and live it up in luxury rentals for their last decade of life. They can get lots of smashed avo delivered by the menulog lowrider before they die, leaving their kids with nothing.
Exactly what I encourage my olds to do. All I ask is to have the holiday house available to me sometimes too :)
If you sell investment property and are suppose to pay Hugh tax, would you suggest to do salary sacrifice to put money in super and get taxed less?
who is this Mr Hugh Tax you speak of, do you know his bsb & acc details?
Yes that will save you heaps of tax and will compound over time. As long as you don't need the money until you turn 60.
About $180K
and to borrow the lyrics from the little mermaid,
those doing so well raking in so much super at their 30s to 40s could not care less of their less fortunate counterparts
they then become greedy going to their financial advisor asking for the best way to rake in even more at higher risk strategies'Poor unfortunate souls
In pain, in need
This one longing to be richer
That one wants to get more money
And do I help them?
Yes, indeed
Those poor unfortunate souls
So sad, so true
They come flocking to my cauldron
Crying, "Spells, Ursula, please!"
And I help them!
Yes I do''Now it's happened once or twice
Someone couldn't pay the price
And I'm afraid I had to rake 'em 'cross the coals
Yes I've had the odd complaint
But on the whole I've been a saint
To those poor unfortunate souls'' Life's full of tough choices, isn't it? Heh heh.
Oh, and there is one more thing.
We haven't discussed the subject of payment.'but…
'You'll have your super, your pretty nest egg.
And don't underestimate the importance of the value of your yet to pay off house, ha!'Come on you poor unfortunate soul
Go ahead!
Make your choice!
I'm a very busy woman and I haven't got all day
It won't cost much just sign your rights away!''You poor unfortunate soul
It's sad but true
If you want to cross the bridge, my sweet
You've got the pay the toll
Take a gulp and take a breath
And go ahead and sign the scroll
Flotsam, Jetsam, now I've got her, boys
The boss is on a roll
This poor unfortunate soul
Beluga sevruga
Come winds of the Caspian Sea
Larengix glaucitis
Et max laryngitis
max the super
max the super
max it now!'I’ve been sole tradering for a while and never opt into super. Seemed to make more sense to invest in myself, if my skills and business are going to do all my earning until I die. Cancer takes people in my family about retirement age anyway.
Health, family history is weighing on me too. I am only planning to have enough until 70. lol & I am being optimistic.
Approx 480K, 35yr old, ADF since 18.
Well done (sincerely), but that does reinforce my perception that federal government Super is substantially over-generous.
Thanks
Its a super that is no longer available to people who join now. Its called MSBS and I think it stop getting offered in 2008.
ADF super is the one which is available now and is nothing special.
432k age 34
maxed out concessional contributions since 2012, started work in 2010
as for your question, i know i'm probably ahead for my age. In my opinion, the aim for most people ought to be to have 1.6m by preservation age.
You have how much, in 34 Earth years of life?
06-08 - part time work during uni, maybe had 10k by 2009. Took advantage of every govt co-contribution at the time. Then started work properly from 2010 onwards. 2012-2021 put in the max concessional cap every year so that's 25+25+25+30+30+25+ etc that's about 300k of principal, the rest being investment gains. Over 10+ years. Not that impressive once you see the working out. The ADF mate above me did similar.
I have pretty much nothing and still have a HECS debt, yeah I'm likely farked but am planning to work for at least another 35 years if I'm alive and able
I've made some pretty horrible work and life choices and investments in the past, but you live and learn.
You're not farked if you can contemplate working another 35 years. A lot of people like you at all different ages.
My dad is an example of close to worst case scenario at retirement, blew his money and is now 72 with a net worth of approx 100k - that said even he's doing ok on the pension, enjoys his life, seems to have enough money.
34yo with 90k in super. Worked part-time during University (4 years) and lived abroad for 2 years. So realistically been contributing on full time salary for 9 years approximately now. Since reading barefoot 2 years ago have been paying an extra 5.5% through salary sacrifice and as he says in his book, haven't missed it. I will aim to increase it little by little as I can comfortably manage my commitments, up to eventually maximising voluntary contributions.
My dad was on defined benefits and had a very generous super payout (ESSS) so I need to adjust my expectations because that won't be the same for me. I'm reading that lots of people seem to believe $450-600k by retirement with a house paid off is a suitable goal.
I'm pretty sure it's because they are all full of shit. It's been the same there since before crypto. All on $300k a year as a level 1 helpdesk phone answerer.