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kass87

Super funds

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kass87

So as I posted recently I got my first job. Now I don't know anything about super funds. But I joined hesta as that's who my employer recommends. Question. Should I be adding extra payments to this seperate to my pay. 

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blimkybill
15 minutes ago, kass87 said:

So as I posted recently I got my first job. Now I don't know anything about super funds. But I joined hesta as that's who my employer recommends. Question. Should I be adding extra payments to this seperate to my pay. 

I am with Hesta and have always been happy with them.

If you can afford extra payments then it can be a good investment. Many people put in extra payments in the later years of their career to top up retirement funds. But if you are paying off a mortgage, or saving for a home deposit, then most people find it more effective to pay down the mortgage or save for the deposit. Or you may have other important priorities for your money at this stage of your life. Please note: this is not financial advice and I am not a finance professional. 

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timtam92

If you can afford it I would salary sacrifice some super. Start small and then increase it as you can. Small consistent amounts will make a huge difference to your balance in retirement 

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born.a.girl

YOu can pay extra tax deductible contributions to super now even if you don't work for an organisation that offers salary sacrifice.

It's important to remember that for many employees, adding extra is tax effective.  You need to be in a higher marginal tax bracket for it to be worthwhile to you, because any tax deductible contributions you make will be taxed at 15% in the fund.   If you income is low enough, you will get this tax back into your super fund after you've done your tax return.

Super is incredibly complex, and it's not necessarily the best thing to put money in, and even if it is, putting it in and claiming a tax deduction, or putting it in as an 'after tax' contribution, can have significant consequences.

See if your fund offer any free advice.  Even as an ex CPA, I still choose a fund which gives me financial advice (which costs me) as I want my decisions looked over by someone totally familiar with the field.  There are lots of traps for the unwary.

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BornToLove

Pay attention to the fees. Both management fees and the cost of the insurance with your super. Especially if you have a lower balance, fees can eat away your contributions. 

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born.a.girl

OP I can't remember if you said you were casual or part time.

There have been significant issues with casuals being paid out under insurance, even those who had the same hours each week, as the insurance companies said they had 'no fixed hours of work'.   It's something you need to think carefully about, because insurance can eat into your super money, fantastic value if if's ever needed, a waste of money if it's not going to work for you.

 

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Murderino

Every year at annual review time the financial counsellor at our workplace would send an all staff email reminding us that if we got a pay rise we should try just diverting that to super as we were already living on the income we had.

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mumto4boys

One of the easiest ways to build your super is to start by salary sacrificing the super you already pay. 
 

this means you will pay slightly less tax and actually end up with a little bit more take home pay. Phone your super provider and get them to organise it. Then, after a few weeks, when you see what you’re getting in your take home pay, use some of that as a voluntary contribution to your super.

 

When I first Did this, many years ago now, salary sacrificing my super meant that I had about an extra $30 a fortnight in my take home pay. A tiny amount to some, but I took $20 a fortnight of this and put it in to super as a voluntary payment. 
 

That left me a tiny bit more in cash, but also started adding extra to my super.

 

Since then,  when I get a pay rise, it’s always been some for me and a bit more for super. I don’t notice the difference because I do it right away. I’m now up to a voluntary contribution of $100 a week. 
 

If circumstances changed and I wanted to stop the extra payment, it’s just a quick phone call to my super provider to have it changed.

 

Remember, the younger you are and the earlier you start, it all adds up.

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SplashingRainbows

Mum to 4 boys you’ve posted this before and as a professional in the industry I have no idea what you are on about. 
 

The only thing I can think of is you work for an employer where the super rate is above 9.5%. That is a very very small part of the workforce and those arrangements are not relevant to the majority of the workforce. 

it’s really not advice that should be given to general employees, and I am making this statement because I think it is misleading and I want readers to be aware. 
 

OP I would encourage you to seek financial advice about the impacts of making super contributions. 

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born.a.girl
7 hours ago, mumto4boys said:

One of the easiest ways to build your super is to start by salary sacrificing the super you already pay. 
 

this means you will pay slightly less tax and actually end up with a little bit more take home pay. Phone your super provider and get them to organise it. Then, after a few weeks, when you see what you’re getting in your take home pay, use some of that as a voluntary contribution to your super.

 

When I first Did this, many years ago now, salary sacrificing my super meant that I had about an extra $30 a fortnight in my take home pay. A tiny amount to some, but I took $20 a fortnight of this and put it in to super as a voluntary payment. 
 

That left me a tiny bit more in cash, but also started adding extra to my super.

 

Since then,  when I get a pay rise, it’s always been some for me and a bit more for super. I don’t notice the difference because I do it right away. I’m now up to a voluntary contribution of $100 a week. 
 

If circumstances changed and I wanted to stop the extra payment, it’s just a quick phone call to my super provider to have it changed.

 

Remember, the younger you are and the earlier you start, it all adds up.

I can't quite work out what you're talking about either.

All I can think of is that you were paying extra super from your after tax pay, which you changed to paying from your before tax pay.

It's no longer relevant how people pay extra super, you can achieve the same net tax result which ever way you do it, you don't need it to be via salary sacrifice. You also always need to remember that there is 15% tax charged in the fund, on concessional contributions, too.

It's just too complicated for people to get sufficient advice here without knowing their exact circumstances, stage in life, aspirations, responsibilities etc.

 

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Luci

Mum 2 4 Boys I can't quite work out what you mean either.  But I agree with Born A Girl above that financial advice is complex and what might be a good financial decision for one person might be a terrible idea for someone else.   Proper advice requires a thorough knowledge of an individuals financial circumstances. 

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CrankyM

See if your super fund provides financial advice. It can be incredibly complex and is very dependent on individual circumstances. If you get financial advice they will be able to provide information that is relevant to your personal circumstances.

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jayskette

as this is your first job, and employer chose Hesta, I doubt you are earning enough to be considering complex financial playing around with super. I would however recommend that you do a diary of your outgoings and any that is left over to nominate an amount that you can put away into super, even if it's only like $10 per pay.  the joy of seeing your super grow exponentially every financial year is indescribable :) another advice is to research the fund's investing options and to select a choice that reflects your age and circumstances. 

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