Alex

We acknowledge that we are recording this podcast from the lands of the Gadigal people of the Eora nation. We pay our respects to Elders past, present and emerging and celebrate the diversity of Aboriginal and Torres Strait Islander peoples and their ongoing connection to land and waters throughout Australia

Ange

Welcome to super simple chats, Rest’s very first podcast. I’m Ange..

Alex

And I’m Alex

Ange

And we will be speaking to industry experts about all things super.

Matt

Wait, what the hell is contributions as well?

Ange

I didn’t realise until recently, that super is invested, I thought it was like a savings account

Sarah

I’m not sure it’s helpful to talk about specific numbers, but it’s a lot less than a million dollars.

Person

This is actually really important to talk about, because I don’t want to miss out on those things

Ange

Trying to make it understandable and relatable for every day Aussies.

Alex

After all, it’s one of the biggest assets you’ll ever have.

Ange

Now this wouldn’t be a financial podcast, if we didn’t start by mentioning that the information discussed is general only and doesn't take into account your own financial situation, needs or objectives. This information and the relevant products are issued by Retail Employees Superannuation Pty Ltd. Before deciding to join or stay, consider the relevant Product Disclosure Statement and Target Market Determination at rest.com.au/pds and whether it is appropriate for you. While we have endeavoured to ensure the accuracy and reliability of the information provided, there may be inadvertent errors or omissions. Before acting on any advice, we recommend you speak with a financial adviser.

---------

Ange

Most people associate the five love languages with their relationships. But who says that you can't actually give your super a little bit of love. So joining us today is Matt from Rest, and he's going to be talking to us about how you can give you super love and how that might help you grow your support for later. So thank you for joining us today

Matt

G’day and thanks for having me. I didn't realise I was a love expert.

Ange

Today it’s love and super.

Alex

They go hand in hand. Everyone knows this.

Ange

We are going to be throwing this at you. So firstly, do you know what the five love languages are? And if you don't, that's okay because we're going to be rapid fire questioning you.

Matt

Semi, semi familiar. But if you want to fire them at me and I'll see how they relate to super, I'll, I'll give it a crack.

Ange

Amazing. Let's give it a crack Alex okay?

So if your love language is quality time, how could you show that by loving your super.

Matt

Quality time, okay. I think for me, you know, super’s a long term investment is something you're going to have for 30 to 40 years in some cases. So just get to know it a little bit more. So engage with you super as much as you can over that time. And it's probably going to make a big difference come retirement.

Alex

Okay. What about acts of service?

Matt

Yeah. I think simply just probably just keeping on top of your super. Maybe just checking that your employer is paying, that their contributions might be something that relates there.

Ange

Amazing. What about for those who it's physical touch?

Matt

Physical touch. Oh, this is probably one that's close to me and close to my heart. And I think it would be, potentially downloading the app of your respective fund. Most super funds have an app. I’m a little biased working at Rest. We have a great app.

On the whole, most funds do have an app, and it's the easiest way that you can stay on top of your super, check all your balances, contributions, everything. So that would be probably that physical touch. I know it's more the eye-thing scanner these days, but some have still got the touch button to open up the phone

Ange

Well it is super at your fingertips, right?

Matt

That's it. That's what they say. So yeah I think downloading the app of your respective fund that would be the best thing there.

Ange

Amazing.

Alex

Okay, from now for my love language: words of affirmation.

Matt

Words of affirmation okay, so we're getting into detail now. I think, what I would think of here is probably around opening any comms you get from your super fund. So I'm sure there's, there's emails that people receive from their super fund and they may go to spam, they may not get opened. But there's one really important comm that comes once a year, and that's your annual statement. So I think probably just opening that statement, having a look at it, seeing what's going on with your account and your respective fund, probably that would be the best thing to do there.

Ange

Amazing. And one of my favourites, don't tell my husband, gifts!

Matt

Yeah, geez, who doesn't like gifts. And I think for me, gifts probably just relate to.. probably the biggest thing to do with super, and that's contributions going into your account. Whether that's, your employer contributions or contributions that you're putting in yourself. So, they're the greatest gift of all going into your super. So certainly something I can relate there with the love languages is, you know, gifts and contributions for sure.

Ange

Who said you can't love your super? There are five ways you can love your super.

I guess super is one of the biggest assets that most people have in their life lifetime. And it's one that actually, to your point for quality time, grows over your working life.

And I guess going back to the gifts question, what are some ways that people could contribute to that superannuation?

Matt

Yeah you’re so right about being one of the biggest assets. I think most people, super will be their biggest asset outside of the family home when they come retirement. So yeah, the contributions going in are very important and there's probably to two core ways. There are a few other ways, but there's two core ways that you can receive contributions. The first one being what's referred to as SG or super guarantee. Now these are the contributions that, your employer pays into your account. So, your employers, you know, mandated to, to by law to pay these contributions. And at the moment it's a rate of 11.5%.

And when I first started working in super was 9%, and before that it was even smaller. But it's come a long way. So much so it's actually going to 12%, next financial year as well. So, you know, all these additional amounts going into your super compounding of the lifetime of you working will make a big impact on your account.

The other way would be, you know, what's referred to as salary sacrifice. Now, these are additional contributions that you're basically asking your employer to redirect from your salary or your pay into your super.

Now, there's a few ways you can do this. You can say to your employer, hey, instead of, you know, putting, this extra $100 a fortnight into my bank account, can you redirect it into my super or you can say, hey, look, can you redirect 5% or 2% of 1% of my salary every week, fortnight, month into my super, and obviously for me, you know, this is a great way to, to build your balance.

But at the same time, I'm very mindful of salary sacrificing in the current climate that we're living in. I mean, I'm sure you guys would be fully across the cost of living crisis that we're in at the moment. I'm sure when you go shopping, you notice those, the shopping bags don't fill up as much as they used to as well.

Ange

That’s the truth.

Matt

So yeah, look, I'm certainly mindful of, you know, you know, encouraging, you know, completely encouraging people to, to go ahead and, you know, put as much money as I can into super because, I know every, every cent counts at the moment, but at the same time, you know, it is a great way, if you can afford it, to obviously build up that, that nest egg come retirement.

Alex

Now, Matt, can you myth bust a belief I know that a lot of people have, have. And I've heard this a few times, and that's the idea that if super comes out before you get paid, does that mean you're actually missing out on more pay?

Matt

Yeah. Look, I understand why people would potentially think that. And I think it probably comes back to, you know, if you start in a workplace and you saw a job, add on like Seek and you know, that said that job ad said a $100,000 package. You know, for me, I would probably assume that that meant, package inclusive of super, not 100 grand plus super, but some, some people might think, well, it's 100 grand plus my super, which is 11.5% at the moment.

So I think I think that's where people potentially think, oh, my employee is taking money.

Ange

They trip over the term ‘package’

Matt

Yeah, people are thinking, oh jeez my employers, you know, they've said this, they’re only paying this. And then, you know, this super’s just been taken out of my, you know, my bank account. And it's certainly not the case.

I think for me, it's, you know, obviously it's easier said than done. But when you do start with, with an employer, or even ideally before you start with an employer, is just clarify your, your salary package and just understand what it means to be inclusive of super or not inclusive of super. They do have to pay super, but it's just whether the package specifies it. So certainly something to be mindful of. And then obviously when you do start, have a quick read through that contract, which I'm sure you all do.

Ange

Yes, yes we all do that very much, end to end.

Matt

At the end of the day, it's, you know, it's like it's your money, you know, the money that's going in your bank account is your money, obviously. And the money going into your super account is your money as well. It may not seem real now, but it certainly is real. And you'll be able to access it later down the line.

Ange

we've actually gone out and spoken to everyday Aussies about this exact topic.

-------

Sinem

Have you ever thought about whether making any additional contributions is the right fit for you?

Man 1

No. Not really.

Woman 1

I have at the moment making additional contributions isn't feasible for me,

Woman 2

I was thinking, but I haven't done anything about it.

Man 2

I did make extra contributions when I was younger. I don't feel I need to do that now.

Woman 3

I did do it like a little calculator thing once, and I was like, oh, I probably need to start adding.

-------

Ange

So I'm a comms person, so maths is not my strong suit, and I don't like numbers as much as I like words. But for those of us who really want to understand how much super they should be getting paid, how do you figure that out?

Matt

Yeah, I mean, there's some there's some old school ways you can just add 11.5% on top of your how much you're earning. But if you want to do it the easy way, there's so many calculators online. So if you have a look on, the ATO has an Estimate MySuper tool, that you can access, I'm sure if you just jump in to Google and type in super calculators, they'll pop up quite a few as well, so you don't have to do it the old school way. You don't have to get out of pen and paper or even your phone, and put in the calculations.

Ange

That’s music to my ears

Matt

Yeah, I mean, I'd use, you know, the technology these days, you know, within super financial services is amazing. So much better than when I first started working in super and, you know, use it as your friend, it's your helper. And if you're, I'm sure there's some sort of AI out there as well, these days that could help.

Ange

Let's test it right after this episode.

Alex

Let's invent it and live off the money (laughing).

Okay, that's enough talk about calculators and maths for this podcast. You mentioned there were other ways to contribute to your super besides the super guarantee contributions. What are they?

Matt

Yeah so, this yeah, the traditional employer contributions that they have to pay into your account. The other two main ones would be yes, salary sacrificing and first one being salary sacrificing, sorry. And that one is there's basically an arrangement with your employer. You'd ask them to, you know, put in an additional amount into your super every, every pay run. And you can nominate the amount that that is whether it's $5 or $10 a week, which, you know, over the long, you know, over 30, 40 years will hopefully compound into something nice and juicy.

Or you can ask them to, to put a percentage of your salary into your super as well. So that's salary sacrifices, arrange it with your employer.

The other thing you can do as well is just add additional contributions, post-tax contributions. That is. I will actually, sorry, I will just clarify with the sal-sacrifice contribution, there are tax advantages to that in a sense that it's only taxed at 15% as opposed to your marginal tax rate.

Ange

Great, cos that was going to be my next question

Matt

So your marginal tax rate obviously it depends on how much you're earning. 15% tax compared to a lot of marginal tax rates is, is a lot less. So it can be tax advantageous, trying to get that word out. So certainly something to consider.

The other one is member contributions, or voluntary contributions. Now, these are post-tax contributions. This is money that's already in your bank account.

Alex

Okay.

Matt

And if you wanted to start making contributions to your super directly, there's a whole range of ways you can do this. Once again, I talked about an app, the apps before generally within apps, there's B-pay account details or various payment methods, you can pay directly into your super fund. Please note that there are caps on how much you can put into your super, as part of voluntary and sal-sac contributions. Those are available online as well. But, as much as I'd like to say put in as much as you want, there are there, are limits to how much you can put in.

But those are the two, there’s some various other ones. But I think, I think probably for the purpose of today just probably touch on those too, just to give you a bit of an intro into super, there.

Ange

What I'm getting from this is there, there's a before-tax way of doing it in an after-tax way of doing it. So before tax was salary sacrifice, after tax was voluntary contributions.

So if we were to weigh the two, what I guess the pros and cons for each one of those.

Matt

Yeah. There are pros and cons. And I think once again, it does come down to the individual, how much you're earning, you know, how much is going into your super at the moment as well. So I think if you are going to start to look to, to make additional contributions to your super, I would certainly take advantage of any financial advice services your fund offers, because they can run through, these, these sort of contribution calculators with you and talk to you about the pros and cons of each.

I think, I'm sort of mindful of, of sort of giving broader pros and cons because it will affect people in different ways. But there are some really great upsides. But obviously there's a few risks involved as well. And I think as well, you just you need to be mindful that super, once you put money in super, you can't take it out until you retire.

I mean there's obviously ways that that you have been able to, you know, access super early. We saw that during Covid. But they're very special circumstances. So you do need to be mindful that once you put it in there, it's tucked away for, for your retirement.

Ange

And just one thing. So you mentioned earlier that there are tax benefits to that before-tax, or the salary sacrifice, cos it’s 15%. If you were to put money in afterwards. Yeah. What's the tax situation, because you've already paid tax on that.

Matt

Yeah I mean in theory if you've if you've got money in your, in your bank account, you probably pay tax on it at some point. So the beauty about voluntary contributions is there is no tax on them. So when it goes into your account, zero tax, which is, which is fantastic. And obviously another incentive to put it in there. And look, if you're putting money into super like as I mentioned, it's a really good way to save, because you won't be able to take it out for some time as well, as opposed to putting it in a savings account and potentially dipping into it when you want to.

Ange

So I've heard through the grapevine that there are a few ways that the government tries to encourage us to engage with our super. Could you tell us a little bit about these?

Matt

Yeah. There's something, a great initiative called the Government Co Contribution Scheme, and it's aimed to, to help low to middle income earners. And the basically the way it works is, if you contribute a certain amount of money, of your post-tax money into your super, the government will actually add a certain amount as well, depending on how much money you earn as well.

Ange

Is this is free money?

Matt

Well, look, I wouldn't say free money. You have to contribute. You have to contribute some of your own money first. But the government will match it by up to half in some instances. So I think for me, the numbers can get a little bit complicated in terms of how much you need to put in, how much you can get back, but there certainly is an opportunity to get some money from the ATO. So what I would highly suggest is that, if you're listening to this, go check it out online. It's called the Government Co-contribution scheme. And you can have a look at, you know, your eligibility depending on your salary bracket and how much you could potentially get back from the ATO into your super. The best thing about this as well is you don't actually have to apply for it.

When you lodge your tax at the end of financial year, the government will match up any additional contributions you put in yourself and then your salary. And if you're eligible, they'll just make that additional contribution into your account. Assuming we have your tax file number or your tax file number is on the on file at your respective super fund.

Ange

So you don’t have to do anything, it just magically appears.

Alex

Easy peasy

Matt

It just magically appears.

Ange

So it's magic money, magic money. Maybe not guys, maybe not magic money. But that's really great.

Matt

I think for me, it's, you know, it's a really good way, you know, if you, if you're not earning, you know, a significant amount of money, then obviously there's not a huge amount of super going in every year.

So I think it's a really good way to encourage people to, to make additional contributions if you can afford it. And then, you know, getting a little something back from the ATO is always a big, big win, right?

Ange

You know what this reminds me of when I was a kid and like my mum would say, if you put a dollar in the savings jar, I'll match the dollar.

Alex

Such a nice mother.

Ange

Reminds me of that a little bit, but obviously not the same.

Matt

And look, there was, there was a time actually where the government would match it one for one as well. So now you put in a thousand, you potentially…

Ange

Bring it back! (laughing)

Matt

But yeah, but now that the most you can get from them is $500

Alex

That's still pretty good.

Matt

It’s $500, right, that’s something. And look, if you start doing this early, we talk about it a lot in the super podcast. The power of compound interest. Start doing this year on year. It's going to compound into hopefully a nice juicy balance come retirement.

Alex

Okay Matt, well that sounds pretty good. But are there any other ways the government might try and get us to love our super?

Matt

Totally. There's another way, that can assist low-income to middle-income earners as well is something called the LISTO, which is the low income super tax offset. And basically, what this initiative does, it allows you, depending on how much you earn, to potentially get a refund of some of the tax that you've paid on your super up to $500.

But be worthwhile once again jumping online to see if you eligible for this.

And you know, there's plenty of details available on, you know, via the ATO or your super fund as well as search LISTO. And you should be able to pull up some details on that as well.

Ange

And do you have to apply for this? Or is that like the other government contribution, it just appears.

Matt

Yeah. Once again. Similar. Similar to the government co-contribution scheme. As long as you've got your tax file number on file, with the super fund, when it comes to tax time lodging your tax return, the government will match up your, your salary. And then if you're eligible for that, that offset at the end financially automatically like magic in your super fund again

Ange

So we've spoken a lot today about making contributions, but not everyone at the moment is in a position to make contributions to the super, as we kind of spoke about at the beginning with the cost of living crisis and stuff like that.

So if you can't make contributions, what are some of the ways you can show your super some love?

Matt

There's a really easy way you can show you super a lot of love. And that would be potentially downloading the app of your respective super fund. Think for me, I'm obviously slightly biased working at Rest, but we have a great app and I know a lot of other super funds have great apps too.

Within an app, you can check your balance, your contributions from your employer, any additional contributions that you've been putting in as well, insurances and you know, your investments too. So, you know, it's the easiest way to be engaged with your super, you don't need to call, a call center or wait for that annual statement. It's at your fingertips.

So the easiest way you can show your super bit of love is downloading the app of your respective fund and having a look at it every once in a while.

Ange

And just engaging with it?

Matt

Engage with it. That's it. And look, if you if you can afford to make a few changes, look, I would highly suggest speaking with an advisor before making any changes.

But, you know, super now is very much at your fingertips. And I know, you know, working in industry for some time, I'd love more and more Australians to be engaged with their super. It will make such a big impact come retirement.

Ange

Thank you so much for joining us today, Matt. I thought that was a really great episode.

Matt

You’re welcome. Thanks for having me.

Ange

You'll be thinking about love languages all the way home now.

Matt

Of course I will. Of course I will.

-------

Ange

So please make sure to like, follow and subscribe

Alex

For any more information on the things we spoke about today there’ll be some links in the description below.

Ange

And that is..

Ange&Alex

Super Simple!

Ange

Keep in mind that tax rules can be tricky and are always changing. The information provided here is for general informational purposes and should not be considered as tax advice. For advice that fits your own situation, it's best to chat with a licensed tax professional.