Tips for boosting your super

In the latest edition of Exploring Super, we talk to ESSSuper Member Education specialist Tom Crandle about some of the ways you may be able to boost your retirement savings. We discuss making additional contributions, reviewing investment strategies, consolidating super, and more.

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This podcast is of a general nature only and does not consider your personal circumstances, financial needs or objectives. Before acting on any advice contained in this podcast, please download and read the relevant Product Disclosure Statement and target market determination, found on our website: esssuper.com.au. 

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Content was up to date at time of recording and thresholds do change due to federal legislation. For more information on eligibility for todays content please refer the ATO website ato.gov.au 

Transcript

Transcript

You're listening to exploring super the exclusive podcast for super members.

00:00:11 Felicity

Welcome to Exploring Super, the exclusive podcast for ESSSuper members. I'm Felicity Brasher, the group executive for member services.

00:00:19 Christian

And I'm Christian Kueng. I'm the manager of member education.

00:00:22 Felicity

Today we're joined by Tom Crandle, our digital education specialist here at ESSSuper welcome Tom.

00:00:29 Tom

Thank you for having me.

00:00:30 Christian

I Believe you're here today to provide some tips on how to boost your superannuation.

00:00:34 Christian

So could you give us an idea of?

00:00:36 Tom

What you look to cover off today, most definitely Christian. And thanks homie. So today I'm gonna go off a number of tips to boost super. A lot of it is contributions, but there are other things that we can actually have a look at to make the most of your superannuation while you're still not drawing down on it. Basically, I will say that a couple of things today. Won't suit everyone's needs. Go through a list of contributions, investment choices, insurance.

Not everything will work for every single listener out there, so you do have to look into these further and I'm not going to do a huge detail because some of them are quite complex with their eligibility, right? So I'll finish up with some other resources to help you, but definitely just do keep that in mind that not everything will work for you today. The other thing to consider is look, Preservation rules do apply with superannuation, so when you put money in, you can't just necessarily take it out again straight away. So we'll cover up today.

00:01:26 Felicity

Yes, good thing.

00:01:30 Tom

Definitely. And the other thing is a lot of our listeners are defined benefit members. So defined benefits are generally not as flexible compared to accumulation plan products. So our state super members can easily create an accumulation plan through the members online and many service members actually get given an accumulation plan already. So they can utilize that. They don't need to set one up.

00:01:52 Felicity

OK. Then, Tom, well, we might get straight into it. So what's your first tip for the listeners out there?

00:01:58 Tom

It seems quite simple. They're Felicity, but paying more money into super so contributions.

00:02:02 Felicity

There it is.

00:02:03 Tom

OK, this can be done in a number of ways. Now regularly deducted from your pay is nice and easy for you. Tell your payroll what to do and they will send it to the fund.

Yeah, you can do regular contributions on a pre tax otherwise called salary sacrifice or on a post tax basis so concessional or non concessional contributions. There are limits and and so you have to be aware of those contribution limits which of course the fund can help you with and the ATO can help you with.

00:02:18 Felicity

Yes.

00:02:31 Tom

But having really deducted from your pay is a behavioural thing. It's done for you so you don't have to worry about paying it to the fund later on. You can also do personal deductible contributions or other post tax contributions yourself system and here at ESSSuper uses a Bpay system. So you've got your own unique Bpay details. You can wire the money into your accumulation plan.

00:02:54 Tom

And usually takes about three to five business days and it shows up online, so nice and easy. You can do it at your own leisure. Yes, nice and easy for you. Another type of contribution is a government Co-Contribution. So this does depend on your eligibility. It depends on your income. It's designed for lower to middle income earners. If you put in some post tax money you may be eligible accumulation plan for you after you've done your tax return accordingly. So that's something nice. Something back from the federal government there.

00:03:27 Felicity

Yeah, little little bonus payment if you're eligible.

00:03:29 Christian

That's right.

00:03:30 Tom

Another way is backdating, so couple of years ago, the federal government introduced what they call the unused carry forward concessional contributions. It is a bit of a mouthful, but essentially it's backdating concessional contributions. There is eligibility criteria you have to meet. Yeah. So for that, it's for Members who have a total super balance below $500,000.000, on the 30th of June that just finished. OK. And you can back date up to five years now. The consideration for that is the concessional contribution cap has changed.

Over the years, yeah, it used to be $25,000, then it went to $27,500, now its $30,000. So unused amounts people can use now to work that one out. You're myGov.

So your myGov linked with your Ato actually collates this information because all superannuation funds report to the ATO. So that information is in your myGov. So if you're looking at doing the back dating to see if you're eligible, you must have this system set up and.

00:04:30 Felicity

Yeah, that's a really good tip, actually. The fact that you can check it before you do anything so you don't make a misstep.

00:04:37 Tom

Exactly. Exactly. So you just want to make sure you're in the right position to do so and how much you can.

00:04:42 Tom

So you can actually do that beforehand, 

Another one is called the Downsizer. So this is designed for people who are later on in life downsizing their primary place of residence.

00:04:53 Felicity

Not that late in life, really, Tom, for some of us here. Not that late. Yeah.

00:04:59 Tom

Yeah, for Members who are are currently aged 55 and above and historically have changed that. So at the data recording at age 55 and above, and if you're meeting requirements of downsizing your primary place of residence, yeah, you can put in $300,000 up to $300,000 on an individual.

00:05:16 Tom

Basis yeah, or $600,000 per couple.

00:05:20 Tom

Before it is and so this is actually it's. It sits outside the normal non concessional limits. It's a special type of contribution. So based on eligibility, there's a fact sheet on our website. You may be putting more money later on in life, even if you don't have income from other sources or inheritance or things like that.

00:05:20 Felicity

And it it doesn't impact the other contribution limits.

00:05:43 Tom

No. So it sits outside the normal non concessional contribution limits. 

00:05:48 Tom

If you're doing post tax contributions.

00:05:50 Tom

You can't do any of those if you got above $1.9 million, This is an exception to the rule.

00:05:55 Felicity

Yeah.

00:05:57 Christian

Wow, OK, that's really important to know. Yeah.

00:05:58 Felicity

So nice.

00:05:59 Christian

Yeah, yeah.

00:06:00 Felicity

It's a great exception.

00:06:01 Tom

Now of course you are talking about a lot of money here, so I do recommend people seek further general and in turn financial advice if they think they need it before they look at this. But it's another way of boosting super.

00:06:11 Felicity

Yeah. No, that's great. And yes, that should definitely be.

Getting advice or help from from external people.

00:06:18 Tom

That's it. And there are a couple others. So in terms of helping a partner, we have contribution splitting where you can look at moving some of your voluntary contributions, salary sacrifice from a accumulation plan that goes into your partners. So it's migrating money from your own accumulation plan to a partner's account. So look at that to see if that does work because again, there's legibility criteria for that. But it's just a nice way of boosting a partner. Super. Yeah, essentially there for you. 

Another one is the spouse contribution, where if you put in some money into your partner's account, you may receive a tax rebate. Again, there's eligibility criteria based on partners income and how much you put in, so the Australian Taxation Office has got a pretty good table on that along with all the other ones I've mentioned today. The Australian taxation (office) has got a good website and tables for that, but it is another way of getting a little bit of a tax rebate potentially from the tax office and topping up your partner's super.

00:07:17 Christian

Thanks Tom. You've talked a bit there about, you know, obviously adding extra money into superannuation. What are the considerations that people need to be aware of when doing that?

00:07:26 Tom

Good question, Christian. So when you're putting these contributions into an accumulation plan, you're taking on the investment risk of this product and the money you're putting to super. So reviewing your investment strategy is something that you can also do that could potentially boost super. I can speak on behalf of ESSSuper, we currently have 10 different investment options. It's a spectrum of high to low risk and you can change your mind. We've got a next business day switching cycle at no cost. Yeah. So what we have is all the investment options have asset allocations where they invest in different areas. For example, there's australain shares, international shares, property, cash infrastructure, yeah, just to name a few. Yep. So having a look at the investment strategy you're using, you can change it over time as I said before. Could have an impact on how long it's going to actually last in retirement, but also how quickly it's gonna grow or not grow because you are taking on that risk in the meantime. 

So our website has information about the asset allocation of where it's investing. It also has the performances,  historical performance. And of course what the investment managers are trying to achieve. The objectives for that investment option, so be able to see annual returns monthly and even daily unit prices on the website. We've also got what's called an investment risk profiler. So it's essentially a questionnaire to you ask questions, how you feel about investment and risk and based on your answers, it will say this might be an appropriate investment option for you to employ. You can use that information going forward.

00:08:55 Felicity

OK. And where can the listeners find the investment risk profiler, Tom?

00:08:59 Tom

Yep. So actually there is a link to it through the members online in the calculators section and actually take you out to our public web page where the calculator section is and it's it's the one they're called investment risk profiler.

So, Tom, we've spoken quite a bit about ESSSuper accounts here. What about our Members and our our listeners there who have got additional super accounts or Super accounts that they had 20 years ago that they've forgotten about, have we got any tips and tricks for the members

00:09:30 Tom

I sure do, Felicity.

00:09:32 Felicity

OK, that's good.

00:09:33 Tom

So consolidation with superannuation is definitely a thing. The Australian Taxation Office has got a system called Super Stream which we plug into to find lost super based on your tax file number and you can bring it across. Now there are a couple of considerations. Firstly, you may need to do a bit of searching and find your tax file number. but once you get into that portal, we search through and we find other superannuation wins and we bring them across. Now before you do that ideally you know what product you're closing.

Because it will close any insurances you may have with the other Super Fund or whatever arrangement you have with that other Super Fund. It's gonna close that arrangement. But generally speaking, the more accounts you have potentially the more fees that you are paying. So in terms of tips of boosting super reducing administration fees Is definitely one and consolidation may be in a position to actually help you with that. To get everything in one nice pot. Yeah, may reduce your administration fees too.

00:10:29 Christian

Thanks. Tom. You mentioned obviously other insurance that you might have through other Super funds and looking at consolidation etc. So when looking at other insurances, you may have, have you got any tips for members about what you can do in that space?

00:10:41 Tom

Sure, definitely. So. I mean, the first step is to make sure you're adequately insured and check to see if that's the right level for you. So typically, superannuation funds do offer insurances. You may have some default level given to you already depending on your circumstance, so providing you've got the right appropriate level of insurance can help reduce the eroding of your superannuation. If you've got more insurance than you need chances of, you're paying more premiums than what you do need, which is eroding your retirement savings. Now this is an area where you should seek further general and financial advice on what might be an appropriate level of insurance for you.  So make sure you're adequately insured and it's not more than eating your or your capital than it's required.

00:11:26 Felicity

Tom, you mentioned then about seeking advice for those sorts of things with even just the insurance premiums and the level of of cover that's appropriate. Earlier. You also spoke about choosing investments and investment options.

What are some ways in which Members can get some assistance there?

00:11:44 Tom

Most definitely. So we've been through a few things today and I can understand if Members want a bit more help, yes. So we'll we'll cover off the other resources we have at our disposal, but generally just seeking more professional advice wether that would be general advice or financial advice is a pretty good step. Yeah. So essentially general advice I can speak for here at ESSSuper, it's a free service, yeah, where you can speak to a professional about the superannuation industry. And what you've got and what your choices are now, there are financial advisors out there as well, which we've got access to, which can provide personal advice based on your financial situation, goals, and risk tolerance in terms of investments seeking that extra level of help. If you don't wanna make the decisions yourself, that is totally fine. Making sure we speak to someone who's actually qualified.

Can put you in a good path going forward

00:12:31 Felicity

Great.

00:12:32 Christian

Excellent.

00:12:32 Tom

So just to add to that, in terms of general advice, that is at no cost service here at ESSSuper. Whereas if you're going to the next step, so personal tailored financial advice, yeah, it is a fee for service model here at ESSSuper, it is zero Commission, but it is something that you'll pay for depending on how much you use.

00:12:50 Christian

OK. Tom, look, that's really been very comprehensive. You given us a lot to think about. Are there any other sort of final considerations that you'd have for our listeners in terms of what they can do to boost there super?

00:12:58 Tom

Most definitely. So in terms of what I've been through, regularly review your situation.  So everything I've said today is current in times of recording. But of course, laws do change. Your personal circumstances do change, so it's good to keep up to date with where you're at and what you're doing regarding your superannuation and review it to yourself or not seek further assistance. Yeah. In terms of preservation rules. So before when you're putting money into super, you may not be able to take it out again. Yeah. So it's not as accessible as you may think it is. So just be aware of the preservation rules that do exist with superannuation contributing, as I said before, there are limits. There are contribution caps that exist post tax or pre tax otherwise called concessional or non concessional. So using the Australian Taxation Office website to make sure that you're on the right track and on the right side of those lines is definitely something that you should be aware of that comes to superannuation.

And of course, if you are going to open up a new superannuation accounts, like an accumulation plan, you gotta read the product disclosure statement. Be aware of the fee structure and the target market determination to see if it's the right product for you.

So in terms of other resources. I would start with the ESSSuper website. We have a range of fact sheets and information about the products that we have, including the product disclosure statements. We have the investment returns as well for the invested funds, averages of annual returns, monthly daily figures and all information about the asset allocation where we invest and why. Our Philosophy. Our holdings. There's a bit of reading there. It depends how deep a dive you really want to go into it. Yeah, the Australian Taxation Office has got a pretty good website that outlines all the eligibility criteria I mentioned earlier with the contributions. Mm-hmm. And what I would do is also set up your, my ov and link it with the Ato so you can see where you sit within the contribution limits and your superannuation values, especially if you've got funds outside of E double super because we wouldn't have an idea of what you've got elsewhere. Yeah, so you've gotta take ownership of that and to make sure you're on the right side of those caps. Now, of course, seeking further general advice and financial advice is where we can help you as well. So we've got a hotline which you can utilize and of course, general advice and member education consultants and of course licensed financial advisors.

00:15:12 Christian

Well, thank you very much for coming in today, Tom, and sharing your insights. We look forward having you on again soon. Thank you for having me. Well, that wraps up our episode today of Exploring Super the exclusive podcast for ESSSuper for members, we look forward to producing more content for you at ESSSuper proudly serving our members. If you'd like more information about our investments and products, please go to esssuper.com.au.

00:15:36 Felicity

This podcast contains general advice that may not be right for you. Before acting on anything in this podcast, please review the relevant product disclosure statements and target market determination on our website. We also recommend that you consider financial advice from a licensed financial advisor. The Victorian Government and ESSSuper do not guarantee or underwrite the benefits in our accumulation products.  Information in the podcast was up to date as at August 2024. ESSSuper Financial Advisors are authorized representatives of Link advice, Proprietary Limited who holds the current AFL number 258145 and is responsible for the financial services provided to you.

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