Our smartCoach team receive queries from members on all sorts of topics. Often, there are articles in the press that prompt members to think about their weekend, or how their super is invested.
Here are some of the questions we’ve received lately along with our thoughts. We hope it helps you too.
Our thoughts: Yes. Our mySuper investments have taken positive steps to advance smartMonday’s Responsible Investment credentials. Have a read of this article to learn more.
Our thoughts: If you utilised access to super as part of the government early release measures, and that has helped you manage through a rough year with reduced income, that’s okay. Sometimes we need to get through the now, before we can focus on the future.
While looking after now is, of course, extremely important, it is worth keeping in mind that your super savings are intended to be for ‘future you’. Making sure you are also going to be okay when you get to your weekend is worth taking a moment to think about too.
Although everyone’s circumstances are different, and there are lots of variables, such as the amount you withdrew, when you did so, market changes since then, your day of the week (age) and some other factors, let’s consider an example.
Rashmi is on her Tuesday (in her 20’s) and accessed $10,000 of her super as her work in hospitality slowed and then stopped altogether. Rashmi has recently begun working again, and although she still has a long time to continue adding to her superannuation account before she hits her weekend, she can still take action to replace the money she withdrew.
Rashmi could consider depositing a small amount into her smartMonday account each week.
For instance, if you wanted to replace the $10,000 over five years the easiest starting point is to divide the $10,000 by the number of weeks in five years. This works out be about $38 a week – and is a great place to begin. But there are a few other things to think about.
Superannuation grows in two ways – the deposits we make as well as the earnings our money makes for us. We also pay tax on the deposits we make^. Our investments go up and down in value over time. To compensate for the time Rashmi’s $10,000 was not in her fund earning investment returns, Rashmi could also consider a few other things.
^Superannuation receives different tax treatment depending on how we make a deposit. Salary sacrifice contributions (taken out of the pay before you pay tax or receive your salary) are taxed at 15% - subject to limits. Superannuation paid out of your after-tax money (money from your bank account) doesn’t attract tax when you make a deposit, as you have already paid tax on that money.
Need help? Please contact a smartCoach on 1300 262 241
Our thoughts: The Reserve Bank (RBA) cut the cash rate to 0.1% on 3 November 2020, an all-time low.
A small portion of your super is held in cash (if you are a MySuper account holder). This will vary based on your age*. Cash has less risk than other types of investments, but it also doesn’t tend to grow as quickly, either. Check your account and your investment portfolio and consider if you are satisfied with your current level of investment risk. You also may want to consider speaking with your financial adviser or contact one of our smartCoaches who can help get your contributions, insurance and investments into shape – at no extra cost.
*Our lifestyle approach to investments reduces the amount of your super held in risky assets as you get closer to your weekend.
The information in this article is general in nature and should not be relied upon as personal advice as your personal needs, objectives, and financial situation have not been considered. Before making a decision about any smartMonday branded product you should consider whether it suits your particular circumstances, and, where appropriate, you may wish to seek financial advice specific to your needs. If you do not have a financial adviser, you may contact us to ask about the smartCoach intra-fund advice services you can access through your membership.
