25 November, 2021

Good advice story with Peter

Workplace visits: Supporting you and your staff

When Peter, one of our Melbourne-based Superannuation Advisers, met with member Ken1 in mid-2019, he was surprised to see Ken’s burgeoning super balance.

Ken, then aged 51 with an annual income of $60,000, had a super balance of $650,000 — about $400,000 more than Peter was expecting.

During the meeting, Peter commented that Ken’s super balance was high based on others of a similar age and income level.

Ken responded, ‘You don’t remember me, do you?’.

Fourteen years ago, Peter visited Ken’s former workplace to present a lunchtime talk about growing your super.

Ken explained, ‘I was only in my mid-30s at the time and not really interested in my super. If not for that visit to my work, I probably wouldn’t have started contributing to my super for another ten years or more. But after learning about the benefits of salary sacrifice in that presentation, I went to payroll and began contributing $50 a week to my super, and I haven’t stopped since.’

At the time, Ken’s workmates laughed at him and asked why he’d bother. ‘You’d be better off focussing on your mortgage and worrying about your super later,’ they said.

Ken’s former employer has since shut down, but the successor company puts on an annual BBQ for former employees. At the catch-ups, Ken’s old workmates tell him that they wished they’d done the same thing. With super balances around $250,000, they’ll be working until they turn 67 and can access the age pension.

Ken is looking to retire at 60.

When Peter hears stories like these from members, he wishes more people would start contributing to their super at a younger age.

‘People think that to have a decent super balance, they either need to have a big income or have to be contributing huge amounts, compromising their current lifestyle. But as Ken has shown, contributing an affordable amount over an extended period is often the key to having a good balance, being able to retire when you want and getting that post-work lifestyle that you dream of.’

EXAMPLE: The difference between contributing and not contributing2

Spiros and Angela are both 37 years old, earn $60,000 each year and have a super balance of $50,000. Their employer makes super guarantee contributions of 10% of their income. After learning about the benefits of salary sacrifice, Spiros begins contributing $50 each week to his super through salary sacrifice. Angela opts not to contribute.

When Spiros and Angela turn 60, they both check their super balances. Angela has a super balance of $256,931 and Spiros has a balance of $324,245.

Benefits of having us come to your workplace

At Spirit Super, we’re the experts in super, and we have the information your employees need to achieve their retirement goals. We can come to your workplace to chat about the needs of your staff, hold customised presentations for groups, or offer one-on-one meetings with individuals.

If you’d like to learn about how we support your business or organise a workplace visit, get in touch with a super expert today. You can also call us on 1800 005 166.

1 Identity changed for privacy purposes.

2 Assumptions:

The results from the Moneysmart.gov.au Superannuation calculator are based on the limited information provided and assumptions made about the future. The amounts projected are estimates only and aren't guaranteed. Results are calculated as at 8 November 2021.

  • $74 administration fee each year, 7.5% pre-retirement investment returns each year, 7% tax on earning each year, 0.85% investment fees each year, 0% contribution fees.
  • Results are shown in today's dollars, adjusted for inflation.
  • Assumes that employer contributes an amount equal to 10.0% of ordinary time earnings, increasing with inflation and the increasing SG rate of 0.5% each until it reaches 12% from 1 July 2025.
  • $214 insurance premiums/fees each year.
  • 4% total inflation (2.5% each year for rise in cost of living and 1.5% each year for additional rise in living standards).

We're giving you this information in good faith. It comes from sources we think are reliable and accurate. However, we can't guarantee it's right and don't accept any liability relating to the content or any linked external websites.