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Simple ways for women to boost their super

A major issue facing many women today is their super balance could fall well short of what is needed to afford a good standard of living in retirement.  So why is this the case and what can be done about it?

 

These questions are answered in this “I want to know” webinar where Kelly Power, CEO of CFS Superannuation and Jackie Clark, National Education Manager discuss:

  • What the super gap is and why it exists? 
  • The simple ways women can help improve their financial outcome for retirement
  • Our free resources to help you make more informed decisions about your super.

00:00:15:01 - 00:00:47:06

 

Unknown

 

Hello and thank you for joining us today for our next I Want To Know webinar. My name is Jackie Clark and I'm the CFS Education Manager. Before we get started and in the spirit of reconciliation, I acknowledge and pay my respects to the Gadigal people of the Eora Nation on whose land we work on and meet today. I also acknowledge the traditional owners of country throughout Australia and respect the continuation of cultural, spiritual and educational practices of Aboriginal and Torres Strait Islander peoples.


00:00:47:22 - 00:01:09:16

 

Unknown

 

I pay my respects to the elders and traditional custodians past, present and emerging. Today I'm also joined by Kelly Power, who is our Chief Executive Officer of CFS Super and importantly together we are here to discuss some of the simple ways that we can help women grow their super, boost their super for the future. Welcome, Kelly. Thank you for joining us.


00:01:09:17 - 00:01:39:00

UnknownThanks for having me. Today, as I said, we’re going to cover a range of different topics. So we are going to look at the gender super gap, why that exists. We’ll also do a bit more of a deep dive into the pay gap that exists between men and women and how that impacts on our super. Then we’re going to look at some of the ways that we can help our members, particularly our female members who are joining us today, look at ways that they can actually build their super for the future.


00:01:40:10 - 00:02:07:02

 

Unknown

 

Yeah. Look, it’s really great to be here. Thank you, Jackie. I mean, this is a really important issue, and I think it’s something that we need to discuss and we need to work through and you know, something that I'm particularly very passionate about. I really want to help our female members. And in fact, all of our members have an understanding of why it is that women are retiring with less money than men and what it looks like to have a comfortable retirement.


00:02:07:03 - 00:02:32:22

 

Unknown

 

And I think these conversations are really important in actually bring awareness to this, but also giving people tips on what they can do to sort of, you know, starting now to start to top up your super so that you can have a more comfortable retirement Great. Well, that’s a great place for us to start. I think many of us will be familiar that there is a gap that exists between males and females in terms of our pay but what do we mean by the gender super gap, Kelly?


00:02:33:15 - 00:03:10:22

 

Unknown

 

Yeah. So when people talk about the gender super gap, what they’re talking about is the difference in amounts that people have when they retire. So typically, if you’re a woman, you will have less than a man when you hit retirement. And I think the stats are that it’ll be about 16 to 24% in terms of the gap. So to put that in context, a man aged between 60 and 64 would typically have a super balance of about $234,000, while a female the same age will retire with about $193,000.


00:03:11:21 - 00:03:44:12

 

Unknown

 

So let me just replay that. That actually means someone, a female aged 60 to 64 is going to have a super balance of about 17 and a half percent less than the male of the equivalent age, which translates to about $41,000. That’s a significant amount of money. It’s a big difference. Yeah, it is. And look, I think that the thing that people need to be aware of and think exacerbates this is that the actual average that both men and women retire with at retirement is well below or


00:03:45:09 - 00:04:15:19

 

Unknown

 

well short of what the Association of Super Funds of Australia own, also known as ASFA, estimate that people will need when they hit retirement. And so if you if you’re thinking about having a good comfortable standard of living when you get to retirement, it’s about $545,000 for a single person. Yeah. Kelly these numbers are a little bit disturbing why in 2022 when we have compulsory super in Australia, do we still have this super gap?


00:04:17:09 - 00:04:41:15

 

Unknown

 

Look, they are absolutely disturbing and it is something that I think, you know, we need to bring awareness to it and we need to support in closing. There’s numerous issues, numerous factors that contribute. I think the broader, the broadest and the most significant one is the gap in pay generally. So your superannuation is a percentage, your superannuation guarantee, or SG, is a percentage of what you earn.


00:04:42:10 - 00:05:12:15

 

Unknown

 

And so if you’re earning less as a woman that will flow on to the amount of super that you have. So typically women earn less than men. And therefore, you know, as a result their superannuation amounts lower. In fact the Government has a workplace gender inequality agency and they've just published their recent findings and there is a little bit of good news in terms of there is a slight improvement in that gap but unfortunately it is still significant around 22.8%.


00:05:13:04 - 00:05:36:00

 

Unknown

 

Someone actually said to me once it’s like working one day for free, which none of us really want to do. What does actually this mean in terms of dollars? It’s about $25,800 less in earnings each year for women. Now you've just mentioned that our earnings are tied to our super. So we know that at the moment 10% of our earnings go into super each year.


00:05:36:13 - 00:06:00:22

 

Unknown

 

So that means around $2,580 less in annual super contributions for our members, which is a lot of money, particularly if you’re only just starting out in the workforce, you know, 40 odd years until you retire. So that’s a significant amount. So let’s have a chat, a quick chat around some of the influences or key reasons why this pay gap exists.


00:06:02:14 - 00:06:34:10

 

Unknown

 

Despite legislation being in place, there is still discrimination and bias in terms of women being able to access certain roles. And won't be a surprise to you. Kelly, as a board member, still under-representation of women in senior roles. I think the Australian average for females representatives on boards is around 33%, which is still quite low unfortunately. As we all know, senior roles are typically where the higher income potential is as well.


00:06:35:03 - 00:06:59:20

 

Unknown

 

We also see what they call job segregation across industries and what we mean by that is that in male dominated, dominated industries such as construction, we have a bigger pay gap which is around 30% compared to more traditional female type industries like education. The gap is a lot, a lot smaller. It’s around 10%. And of course, workplace flexibility.


00:07:00:08 - 00:07:28:14

 

Unknown

 

I know you have family. I have family. It’s an important consideration for a lot of females. And the lack of flexibility. We’re very fortunate at CFS. We've got great flexibility, but a number of employers don't offer that. So it makes it difficult for women to stay in those full time positions. This leads this, I guess, to something a lot of women choose to do, and that is to work in either part time or casual type of arrangement.


00:07:29:08 - 00:07:56:01

 

Unknown

 

It’s interesting, the same report that I referred to, the Gender Workplace Equality Agency report over 50% of our workforce is female. Yet of those people working, that’s women working, only 41% of them are in full time roles, which means we’re generally in part time or casual positions. And again, let’s go back to your comment earlier where we were saying that our earnings are tied to our super is tied to our earnings.


00:07:56:18 - 00:08:21:09

 

Unknown

 

That means we've got less money going into super. We've also seen this big trend towards casualization of the workforce and that basically means where our hours are very flexible, which is great. The downside is we don't necessarily have job security. And again, our income is very, it fluctuates a lot. So we’re not exactly sure what’s going to go into super.


00:08:22:07 - 00:08:46:07

 

Unknown

 

Unfortunately, during the pandemic as well, these are the first type of roles that people lost their jobs in. So impacting will be really interesting to see how women’s super balances are challenged over the next couple of years as a result of that. Yeah. Thanks, Jackie, for that. It’s really important issue and definitely something that we need to bring awareness to and I think it’s good that we’re having the discussion today.

00:08:46:14 - 00:09:10:16

 

Unknown

 

There’s some actually fantastic news for people who are working in those part time or casual roles, and it comes out of some recent legislation. So previously, the way that superannuation worked, your employer did not have to contribute to your super if you earn less than $450 per month and that didn't take into account that you might have more than one job, meaning that you combined income was over that threshold.


00:09:11:04 - 00:09:46:11

 

Unknown

 

But from 1 July this year and this is something that the industry has been advocating really heavily for, that $450 threshold will be removed. And so your employer or your employers will now make superannuation contributions into your account on your behalf. And that’s regardless of the amount that you earn. If you think, for example, someone that currently works three jobs, each earning $400 a month for each of those roles, or combined income of $14,400, you’ll now have $1,512 contributed to your super from the 1st of July.


00:09:46:22 - 00:10:17:13

 

Unknown

 

And that’s compared to zero, if you if you think about the previous rules. If you take that forward over a 40 year time period, this could end up equaling something like $84,000 or substantially more depending on how your super is invested. So it’s a really big step forward. It’s something that will undoubtedly help many women who have multiple roles or have income below that $450 threshold and it will help them to grow their super and set them up so that they’re better prepared for their retirement.


00:10:18:14 - 00:10:40:14

 

Unknown

 

Oh look, I even my own children who have just started work in a part time, they’ll obviously get some super now, which is a great we want them to get these early great starts for superannuation. So yeah, I agree with one of the things with super the earlier you start, the smallest amount you contribute just because of the way that compound returns work and interest works does add up to a lot in the long term.


00:10:41:00 - 00:11:05:15

 

Unknown

 

Look, one thing I should mention from here is that that change doesn't apply if you’re under 18 and work less than 30 hours a week. So there is one condition to, to that payment being made. Great. So that that’s one positive change. What else can our members do? And the title of today’s webinar is Simple Things Women Can Do To Boost Their Super, what other things can we do to help close that super gap?


00:11:06:17 - 00:11:29:23

 

Unknown

 

Yeah. So look, there are a number of things and one thing I would say is that, you know, it’s never too late to start considering there’s always options for this, you know, for members to think about the type of retirement lifestyle they want to have and how much super they’re likely to need to afford that lifestyle. So I guess information, education, conversations like this are really important in the first instance.


00:11:30:05 - 00:11:58:01

 

Unknown

 

So we've mentioned those ASFA estimates that a single person will need. So it’s around $545,000 to have a comfortable retirement lifestyle. And it assumes that a comfortable retirement lifestyle includes, you know, being able to meet your ongoing expenses like running a car, you know, buying food, groceries, air conditioning, heating, private health cover, travel, maybe one or two trips domestically or internationally a year.


00:11:58:12 - 00:12:17:20

 

Unknown

 

And I know, I know it might sound obvious but unless you know what your financial retirement goal is like, how do you know if you’re on track to meet it? And how do you know whether you can afford that lifestyle and how you’re going to fund it. We’re very fortunate in Australia that we have access to the Aged Pension, which is that the mandated government pension that is paid.


00:12:17:20 - 00:12:46:13

 

Unknown

 

However, what a lot of people don't realize is that not everyone is eligible for that pension. It depends on two things your assets and your income. So having enough super is also key, not just relying on that age pension, but again ensuring to have a comfortable retirement that you've got that super nest egg that’s available for you. The other thing that we know is that our care requirements and associated expenses tendto increase as we’re at the later stages of our life.

 

00:12:46:13 - 00:13:05:06

 

Unknown

 

So aged care, etc. So it’s important that our super lasts the distance. So the sooner our members start to take an interest, start to take action, putting a little bit of money aside or putting a plan in place to address super shortfalls, the less they’ll need to contribute or top up when they get sort of into that retirement age.

 

00:13:05:06 - 00:13:30:12

 

Unknown

 

And, and, you know, overall, the better that their retirement lifestyle will be. But it’s never too late to start, right?. It’s never too late to start. You can always start making, you know, taking an awareness, finding out where you super is, making sure that you’re making those small top up contributions at any point is important. Look, one of the things that CFS has done is created a calculator to help you work out exactly how much you need to contribute to your super to help you to achieve your retirement goals.


00:13:31:01 - 00:13:49:19

 

Unknown

 

If you go onto the CFS website, you can find this calculator. So that’s one sort of simple step. Go online, check the calculator, have an awareness of how much you need. The second action you can take is to engage with your super. So, for example, do you know what you’re super invests in? Do you know how it’s performed?


00:13:50:02 - 00:14:10:01

 

Unknown

 

What insurance cover do you have and is that insurance cover appropriate to your circumstances? Are you paying for what you get? What is your super balance? What fees are you paying? Actively engaging with your super and knowing the answer to these questions you’ll be able to work out if your superannuation is on track. And if it isn't performing as well as you expected,


00:14:10:01 - 00:14:32:00

 

Unknown

 

you can take action now and you can address it and you can consider what options available for you. So for example, it’s important to understand what your super is invested in and there are many options that are available here. We all are unique. Our circumstances are different. Our, you know, risk tolerance is different. That will be different from my partner, my friends or my family.


00:14:32:10 - 00:14:59:06

 

Unknown

 

If you've got a long time until you retire, you might want to consider more growth oriented assets which are available through our investment options. And so they, over the long term, typically will provide a higher a higher return to grow your super faster. Of course, that option does carry more risk, whereas someone who is getting closer to retirement may be more concerned about like investment market’s going up and down or what’s called volatility.


00:14:59:14 - 00:15:23:22

 

Unknown

 

And you might prefer a more defensive option where investments are protected from some of that market fluctuation and volatility. So while we can't provide you with advice on which option is best for you, what we can tell you that over the life of your super situation will change, and therefore it’s really important to check in and make sure that you’re invested in the right portfolio for your circumstances.


00:15:24:03 - 00:15:54:05

 

Unknown

 

Yeah, I agree, Jackie. I think what’s really important is that you’re consistently checking in on how your super is going, and that includes how it’s invested and making sure that it suits the stage of your life that you’re at. Absolutely. So what about insurance and why is it important to check in with the insurance that you have or maybe have through your super? Yeah look, paying for insurance through super can be a really affordable and cost effective way for you to ensure that you and your family are adequately protected if something tragic did happen.


00:15:55:07 - 00:16:22:05

 

Unknown

 

This is particularly important if you have debts like a mortgage or you have significant responsibilities such as, you know, a family that relies on you for financial support, but that does come at a cost. And so the premiums you pay are deducted from your super and it will impact your super balance. So you need to be aware of balancing out your need to protect your income now as well as those income and retirement needs in fast forward into the future.


00:16:22:19 - 00:16:43:01

 

Unknown

 

So as your circumstances change, similar to what we were discussing relating to investments, I mean, maybe you paid off your debts, maybe your children are older and, you know, maybe you’re lucky enough for them to have moved out. I don't think it’s ever going to happen. And maybe you don't need the same level of insurance. And so by updating the level of cover, you might save on some of those premium costs.


00:16:43:01 - 00:17:03:09

 

Unknown

 

And that means more super available to you, more super earning money for when you hit retirement. But again, the importance of checking in and making sure it’s relevant to your situation at that time. Absolutely. Another great way to engage and to learn more about your super is by attending webinars such as this one. So just even by being here today, you've taken the first step.


00:17:03:24 - 00:17:27:10

 

Unknown

 

You can find a recording of today’s webinar and other ones we've run at CFS, on what’s called the learning hub. You can access that via our website. Fantastic. It’s all about getting started and doing something proactive to manage your super. Yeah, just taking an awareness and, and looking for the tools that are available. I mean, CFS also has an app as well as an investor portal that’s available.


00:17:27:10 - 00:17:55:12

 

Unknown

 

It’s called FirstNet. And you can go online there and find out more about your super, such as your current balance and the fees that you currently paying and where you’re invested. And of course, there’s always our contact centre as well. So always happy to help. Give us a call if there are any questions that you have. Fantastic. Three simple ways, actually, way more than three, but three key ways that all our members, our female members can take to engage more with their super and check in.


00:17:56:16 - 00:18:15:05

 

Unknown

 

Let’s talk about some other strategies I might take over here, if that’s okay. I'm going to talk about some additional ways that our members can actually contribute to the super. So you've talked about engaging more and how that can help. I'd like to talk about some of the simple ways that members can add more to their super.


00:18:15:11 - 00:18:47:16

 

Unknown

 

And the first one that some of you may be familiar with is salary sacrifice. Perhaps one of the things many of us assume is that what our employer puts into super is going to be enough when we retire. You've spoken about the super guarantee before, and that’s that 10%. But what that doesn't factor into account is when you start with your super what age, if you take any time out and again, what retirement lifestyle you actually want. I might want more than a comfortable retirement or I may not need as much.


00:18:47:23 - 00:19:23:21

 

Unknown

 

So we have to take those things into consideration. So assuming that my employer is probably very generous at the moment and putting the 10% in, but I've taken time away when I've had three children from the workforce, then my super I need to top it up a little bit and put a bit more in. So salary sacrifice is perhaps one of the easiest way for you to contribute to your super. So salary sacrifices where you ask your employer to make extra super contributions into your super account straight from your employment income before any tax is actually taken out.


00:19:24:08 - 00:19:53:12

 

Unknown

 

So this is on top of the compulsory contributions they’re making already for you that 10% we've referred to a couple of times as well as saving more for your retirement. The added benefit of salary sacrifice, depending on your personal tax circumstances, is that there is the potential for some tax benefits now. It’s the money that goes in super is generally taxed at 15%, whereas your marginal tax rate or individual tax rate may be significantly higher than that.


00:19:54:15 - 00:20:21:21

 

Unknown

 

So how effective the strategy for you will depend on your personal circumstances and your individual tax rate. So let’s have a look at an example of what a difference salary sacrifice could make for just a small amount that you sacrifice from your salary. So here’s an example of the kind of difference just a small amount could make. Kim and Robin are both age 40, both earning a salary of $80,000 a year Kim, who doesn't


00:20:21:21 - 00:20:49:07

 

Unknown

 

salary sacrifice ended up with the super balance of just over 300 or nearly $346,000 when she retired at age 65. Robin decided salary sacrifice 2.5% of her income each year, which meant she had around $25 less take home pay per week then compared to Kim. But when she retired, her super balance was just short of $400,000.


00:20:49:17 - 00:21:18:15

 

Unknown

 

So she actually had 54, just over $54,000 more than Kim. The great thing about salary sacrifice is there’s actually no minimum amount required although there is a maximum that you can contribute to get that cheaper tax or that lower tax rate of 15%. This is called the concessional contributions cap that currently is $27,500. So the good thing about salary sacrifice is you’re not locked into these arrangements.


00:21:18:15 - 00:21:46:13

 

Unknown

 

So you can stop or increase them depending on what your circumstance is. So it’s quite flexible. I think a lot of people think you’re locked into these until retirement, which isn't the case. Another super strategy that is a great way for people with modest incomes or lower incomes to boost their super is through the government super co-contribution scheme. All you need to do is to make an after tax contribution in the last financial year to super.


00:21:46:22 - 00:22:12:16

 

Unknown

 

And if you’re eligible and that means you have income of less than $56,112, that’s a bit of a mouthful. The government will contribute a payment of up to $500 to help give your super a boost. So I’ll just go over that again. So if you’re on an income less than $56,000, the government will contribute up to $500 additional money. So sort of free money into your super.


00:22:13:10 - 00:22:37:10

 

Unknown

 

And it’s really easy process. Once you've lodged your tax return, the Tax Office will work out if you’re eligible and then will automatically make a co-contribution to your super fund. Happens automatically. It is important though to check if you qualify for this and we have a lot of articles on our website to search under government co-contribution or of course you can visit the ATO website.


00:22:38:16 - 00:23:07:04

 

Unknown

 

The final strategy that I'd like to discuss, I'm pretty sure a lot of our members won't have heard about and it’s the First Home Super Saver scheme and it might feel a bit counterintuitive when we’re talking about taking money out of Super to help fund your first home purchase. But the Government have recognized that it’s increasingly difficult in a particularly inflated property market for first time buyers to be able to save enough for a deposit for a first home.


00:23:07:07 - 00:23:34:11

 

Unknown

 

So what they’re allowing us to do, we talked before about superannuation being a concessionally taxed or this lower 15% tax, allowing you to make personal contributions into your super account and then you’ll be able to withdraw this up to a maximum of $30,000, and the associated earnings when you’re ready to purchase a home. Now you mentioned before, Kelly, that 1st of July there’s a number of super changes.


00:23:34:20 - 00:24:11:16

 

Unknown

 

This is another one and $30,000 really isn't much of a deposit so the Government are increasing that to $50,000 to help our members who are looking to make that home purchase. So should make it a little bit easier over time for those members. Now why would we be doing encouraging people to take money out of super? Well there are benefits this will help grow your super long term the earnings that can continue to compound into your account and also you’re able to put more into super in that concessionally taxed environment which will help our members as well.


00:24:12:04 - 00:24:42:09

 

Unknown

 

Again, the criteria the government has set is really key that you understand this, so we encourage you to go to the ATO website to review the criteria or again you can come to the CFS website and have a look there as well. So given the substantial rise in property prices, hopefully this is something a lot of our members weren't aware of and would perhaps through advice or looking at these resources find out a little bit more and we can help them on the way with that one.


00:24:44:09 - 00:25:16:08

 

Unknown

 

All right. These are just a few of the strategies we've just talked about three strategies or ways that members can contribute more to super. They’re actually hundreds of different strategies. Maybe that’s a little exaggeration, but there certainly are a lot of strategies that are available, and we have put some educational resources on our learning hub, on the CFS website, we encourage you to go and have a look at those short educational videos that talk about all the different types of ways that you can contribute to your super.


00:25:16:13 - 00:25:42:07

 

Unknown

 

There’s also tools, resources, articles and Kelly, you've already mentioned the calculators that we've got available there as well. Yeah. Look, I think that having awareness of those calculators, knowing where you can get more information is really important. One of the things I'm most passionate about when it comes to helping our members achieve their financial goals is helping them access that information, but also helping them access advice from a trusted professional.


00:25:42:08 - 00:26:06:24

 

Unknown

 

There are a lot of things that are, you know, nuanced and individual, and we've talked about some of those today that are specific to certain circumstances. So seeking advice, if you can, when you can is really important. Our research shows that seeking advice from a professional leads to a better financial outcome. There’s research to suggest that even getting assistance with your finances can help reduce any financial stress.


00:26:07:24 - 00:26:32:09

 

Unknown

 

And if any of our members out there are like me, a financial adviser can actually, you know, take the time to put things in place, stuff that I basically never get around to doing, like changing my investment options and sharing my beneficiary. Details are up to date. When I first saw my adviser helping me consolidate my super into one, working out how much I should and could contribute to super noting those caps that you were talking about.


00:26:33:01 - 00:26:59:06

 

Unknown

 

So with this in mind, last year CFS launched a new site to help our members connect with financial advisers. Many of you out there may already have an adviser these advisers can really help and they can help you, you know, look at the strategies and how they can apply to your individual financial needs and those of your family. Our website allows you to search for an adviser based on the type of services they offer, their qualifications, and in particular where they’re located,


00:26:59:06 - 00:27:23:03

 

Unknown

 

because I know a lot of people want to see an adviser face to face. Now we can do that again. Look, we've covered a lot of content in this webinar, so we've talked about the super gap, why it exists, and we've started to look at some simple ways that our members, our female members can actually start to address that gap as well as some strategies.


00:27:23:03 - 00:27:44:18

 

Unknown

 

And I love that last one, getting some good quality advice as well as really important. Yeah, so Jackie we've had some questions come in from our members and we’re going to have a go to the best of our ability of answering some of these questions today. The first question is coming from Karen, who has asked, I've been on maternity leave and now starting a small business and currently have no income.


00:27:45:02 - 00:28:10:22

 

Unknown

 

My husband works full time. What are some of the ways I can contribute to my super while not earning? Great question. And again, it’s great we’re able to help you with this one in terms of there is something called a spouse contribution option. And basically that means while you’re not earning an income, your partner or your spouse can actually make a contribution on your behalf directly into your super.


00:28:11:05 - 00:28:46:08

 

Unknown

 

There’s actually the added benefit as well that your spouse may be entitled to a tax offset. And this applies to people even on lower or modest incomes, less than $37,000. So that’s a great option to actually be able to put some money into super while you’re not earning. Once you start your own business and you start generating some income, then you can look at perhaps some of the other super strategies that we've discussed today or as I mentioned, you can find on our website as well. That’s great.


00:28:46:12 - 00:29:06:23

 

Unknown

 

We have another question here from Peter. I'm happy to take it. How much is really enough for a minimalist person to retire comfortably and look there, I get asked those questions all the time. How much do I need to retire? We talked about the ASFA comfortable retirement standard earlier, which has a particular amount. But look, it really it really differs.


00:29:06:23 - 00:29:33:09

 

Unknown

 

It depends on do you own your own home or are you renting? Are you in a couple? Do you have dependents? All that sort of stuff. And so I think the best thing to do is to direct you back to our website. There’s some great tools on ASIC’s MoneySmart website as well, but on our CFS website, our calculators that can help you work through things and give you options, I suppose in terms of the types of things you'd like to do in retirement so that you can determine how much you might need.


00:29:34:01 - 00:29:59:22

 

Unknown

 

I think another good point on that particular question also is whether you own your own home. Because the amount of money you’re going to need if you don't own your own home, you've got to obviously factor in rent into that equation as well. Okay. So we have another question here from Peter. How do I pay off my, should I pay off my mortgage first or put money into my super as the interest rate on my mortgage is high?


00:30:00:07 - 00:30:24:21

 

Unknown

 

It’s a tricky one. It is a very tricky one. Again, I as much as I would like to give you a definitive answer, it’s really not that black and white. It really is going to depend on your personal circumstances, what your tax rate is, what you’re paying on tax, whether super may be more effective. And again, what sort of home loan potentially you have as well with you on a fixed rate or variable rate.


00:30:25:05 - 00:30:48:20

 

Unknown

 

And Kelly mentioned the find an adviser site. I think that’s probably a question for a financial adviser to sit down and address. Yeah, look, I agree. I got asked this a lot during the pandemic. And I think, you know, paying off high interest debts is typically the first thing that you should do. I wouldn't put a mortgage into that, you know, that category, but credit cards and things like that before anything else.


00:30:48:20 - 00:31:12:17

 

Unknown

 

But then when you come to balancing out things like mortgage payments, and other types of investments and super, it really does come to your particular situation, it is important to seek professional advice in that case, I would suggest. Another question here from Eunice, and it is something that we touched on briefly in our update, but Eunice would like to know how she can change her super from static to increase returns. And static,


00:31:12:19 - 00:31:40:04

 

Unknown

 

I assume you’re meaning flat then they haven't been performing particularly well, which it which is interesting. And I'm wondering the last time you've checked in because probably up until the last few months, super’s actually some of the more growth orientated portfolios have actually been performing really well. So even if you hadn't been contributing to super, you should have seen some reasonable growth again depending on what portfolio that you've been invested in.


00:31:40:13 - 00:32:03:01

 

Unknown

 

Markets have been a little bit volatile of late. So they may have gone up or down. But the best way really to grow your super apart from investment earnings is making those additional contributions. And even if you’re not working, if you do have some savings you can do after tax contributions or personal contributions using after tax money to help grow your super balance.


00:32:03:16 - 00:32:29:24

 

Unknown

 

Kelly pointed out before, though, it’s also really worth checking in and seeing what portfolio you’re currently invested in because there are options that have the potential for greater returns over the longer term. Yeah, agree. Question here from Michelle. I have two super funds. What’s the best approach to choose one to merge the funds? Look, it’s hard without knowing the details of the funds in your circumstances to actually provide you with a view on that.


00:32:30:03 - 00:32:51:04

 

Unknown

 

I mean, I think the great thing, Michelle, is that you recognize that you have two super funds in the first instance. A lot of people don't appreciate that they have multiple super funds and in many cases, individual super funds have a dollar based fee. And so that would mean that you’re paying two lots of dollar based fees. So having one fund you know, in theory should be better.


00:32:51:14 - 00:33:16:09

 

Unknown

 

That said, really look into things like your insurance and your benefits before you move. There may be moving to one fund that doesn't have insurance or there may be particular circumstances relating to your health where it would be good to keep that fund that has the insurance. So one of the things that I would sort of recommend is if you are looking to consolidate your funds, you can go to the ATO website and I’ll give you some good comparisons.


00:33:16:09 - 00:33:44:16

 

Unknown

 

But do watch out in particular insurance. Yeah. So if you've got any health issues and you've got that insurance cover and you cancel it, you won't be able to get it back is essentially where you’re heading there. Also, look for any exit fees that may apply on the different superannuation policies. And Kelly mentioned through the myGov website, you can actually do some comparisons, but you can also consolidate your super there or you can do it through your super funds as well.


00:33:45:21 - 00:34:08:00

 

Unknown

 

Another one from Patty. I'm 62. How do I navigate transition to retirement and at what age can I. Can this be done? What age can I retire? Patty, great news. Age 60. You can retire. You can actually retire any age you like, but you can actually access your super once you reach preservation age. So once you’re over age 60, you’ll be able to access your super.


00:34:08:00 - 00:34:30:01

 

Unknown

 

So we actually have a lot of our members who are transitioning to retirement. That means they have still the option of putting money into super or drawing a partial income. Really depends on your circumstances, but if you've got enough saved up and ready to retire, the good news is at 62, you've got that option A question from Lisa.


00:34:30:08 - 00:34:54:10

 

Unknown

 

Widowed at 39 with two children who are primary age. I was a stay at home mom, super less than $80,000 and so sorry to hear about your loss and I think we you know super less than $80,000 and this is this is one of the key issues that we’re drawing awareness to today but because it’s so low I've invested in a high growth option as well as put in place a small salary sacrifice contribution.


00:34:54:18 - 00:35:18:24

 

Unknown

 

Any other ideas. I think you’re well on track Lisa like have you know if you think back to everything that we've been talking about today, just taking an awareness of your superannuation, knowing where it is, putting aside a small amount in the early start, the better. Even just, you know, even something like $5 a week will have a material impact when you hit retirement just because of those compounding returns in terms of your investment option.


00:35:19:16 - 00:35:50:07

 

Unknown

 

Look, you know, growth, high growth, you've got a while till you hit retirement so you can sort of afford to have that sort of you can manage through that volatility that we spoke about earlier. But again, more detail than that, I think. Speak to a financial adviser without having more particular information about your circumstances. I heard a couple of great tips from some fellow staff, younger staff members, I might say, when they were getting small pay rises rather than taking the pay rise, they'd actually put that into super or rounding up.


00:35:50:07 - 00:36:12:01

 

Unknown

 

So let’s say your income was a odd amount. Rounding, putting the difference into superannuation. So or as you said all those small amounts, they do actually do add up and the compounding effect on the earnings is great as well. Now and we might have just one more question and this one comes from Vicki. Self-employed.


00:36:12:01 - 00:36:32:04

 

Unknown

 

What’s the best way to boost for me as a sole trader? Actually I can speak to this one because my husband’s self-employed and for a number of years we haven't put any money into super because it’s not compulsory as a sole trader. But of course it’s great that you've recognized that, Vicki, because we've mentioned a few times the sooner you can get started,


00:36:32:04 - 00:36:58:16

 

Unknown

 

the less you have to put in later on, you can make personal contributions to super at any time, and you can do that with after tax money. So you can also claim a tax deduction along the way, which is what a lot of sole traders will actually do. So you have a choice. If you've put money into super in the last financial year, your super fund will actually ask you are you intending to claim a tax deduction for that contribution?


00:36:58:23 - 00:37:31:13

 

Unknown

 

If you are, that will the appropriate tax will be taken out if you decide to make it as an after tax contribution, then you will no tax will actually be taken out of that that amount. So there’s always options. There is a little bit of discipline as a sole trader, though, being able to put that money in because it’s not compulsory. Kelly, there are some great questions and I know we probably got many more and there will be an opportunity for our members to submit further questions and we will definitely come back and answer those where we can for you.


00:37:32:08 - 00:38:04:14

 

Unknown

 

I'd really like to thank you on behalf of Kelly and myself for attending today. And we really hope we've started a conversation because that’s what it’s about. It’s really starting the conversation about how you can address your super, close that gender super gap and actually get to that financial freedom or the retirement lifestyle that you want. At the end of the session, very shortly you receive a survey and we'd really love to hear your feedback what you'd like to hear more about and perhaps any future topics that you'd like us to cover.


00:38:05:03 - 00:38:27:14

 

Unknown

 

Kelly, you also mentioned earlier that we’re always here to help. We've got a number of ways you can reach out to us. Get in touch through our website, you can call our contact centre on 13 13 36 or please feel free to email us at contactus@cfs.com.au. Once again, thanks for joining us today. We look forward to seeing you next time.

How does my fund invest responsibly?

Hear directly from Guneet Rana, Executive Manager Responsible Investment and Caroline Paterson, Senior Manager Responsible Investment about:

  •  Our beliefs and approach to responsible investment
  •  How we integrate environment, social and governance risks in investment decision making
  • CFS' position on climate and modern slavery

For more information on Responsible Investing at CFS please visit Intelligent Investing

Hello and thank you for joining us for this "I want to know" webinar. Before we get started, in the spirit of reconciliation, I acknowledge the traditional custodians of our country throughout Australia and pay my respects to their elders past, present and emerging. I'm Caroline Patterson, Senior Manager of Responsible Investment and here today on the land of the Gadigal People of the Eora Nation, I'm joined by Guneet Rana, who is Executive Manager of Responsible Investment to discuss how your fund invests responsibly. Thank you to those who have already submitted questions when you registered and we would welcome any more during today’s webinar. You can send us your question by using our live Q&A function, which can be found on the right hand side of your screen. Simply click the dropdown arrow next to live Q&A and you will be able to type a question to us.
 
So to begin Guneet, perhaps you can tell us a bit about the CFS Responsible Investment team.
 
Thanks, Caroline. Well, the team is dedicated to responsible investment and sits within the broader investments team that is headed by Scott Tully our Head of Investments. Now this structure really enables us to sit with the portfolio management team and integrate ESG, that is environment, social and governance factors into the investment decision making. The RI team is dedicated to ESG and looks beyond the financial factors so that we can really integrate ESG into investment management. We strongly believe that good integration and good investment management of ESG factors can improve the long term return of companies and hence of our members.
 
Okay. Now let’s discuss what CFS means by responsible investment. 
Thanks. CFS defines responsible investment as a strategy and practice that incorporates ESG and climate related factors in the investment decision making. While we understand that our members have a range of personal, moral and ethical views, we strongly believe that responsible investment means investing in a sustainable and responsible way but keeping the member’s best interests at the core of what we do.
 
So understanding that our members hold a wide range of views, what is CFS this process to ensure that we’re investing in a sustainable and responsible way?
 
Well, let’s start with the responsible investment beliefs. The responsible investment policy highlights three of our responsible investment beliefs. The first one is that we strongly believe that good investment management of ESG risks can improve the long term performance of a company and therefore improve the returns to the member.
 
So when a company is considering, for example, how it can use its electricity or gas more efficiently, not only will it be a better result for the environment, but through lower power bills, the company will decrease its expenses and so increase company profits and therefore the return to the investor.
 
That’s right. And your example goes into our next belief on climate change. We have all seen in the media recently the frequency and the severity of floods, droughts, heatwaves. When we talk about the floods in Germany last year, the Californian fires and even closer to home where we have seen the fires and the drought. What is really clear that climate change is having worldwide repercussions not only in the environment but also the communities that we live in.
 
Hence, we strongly believe that climate change is a financial risk and it must be managed within our investment portfolios.
 
And onto the third belief of our RI policy. You used the term before active ownership. Can you explain a little bit more about what that actually is?
 
Active ownership is the use of the rights and position of ownership to influence the activities or behaviour of investee companies. Now, this will include voting on those companies and also engagement with the companies that we invest in.
 
I'd like to take you back now to the first belief again. We've said CFS believes that the management of ESG risks may actually help to improve performance. But what is the process that we undertake to ensure that that risk is being managed appropriately?
 
Now, before we discuss what approach CFS takes Caroline, it may be better for us to talk about the different approaches to manage Responsible Investment.
 
That’s a good point. As the terminology is often used interchangeably in the media and can be quite confusing. At its simplest, it could be divided into three different ways, although in reality they do overlap. There’s negative screening where you may decide that you do not want to give your money to certain companies or industries where their values just don't align with your own.
 
No matter what the potential for financial return. This is also referred to as having exclusions. The opposite of this, if you like, is positive screening, where you actively seek out those companies whose values and priorities align with your own. This is sometimes referred to as impact investing, where the aim is to generate positive or social environmental impact alongside financial return.
 
Now, while positive and negative screens are options for an individual investor, CFS invests on behalf of a large and diverse membership, and so we've chosen to follow a process of ESG integration and active ownership rather than solely choosing or excluding particular industries or companies.
 
That’s right. When we refer to ESG integration, we mean that we put ESG and climate factors into the heart of investment decision making. So let me take you through an example. When we appoint an investment manager, what we do is we spend time with that manager. We first explain to them, "What are our beliefs?" We also explain to them "What are our priorities?"
 
And then we sit with them and try to understand their own integration. That is how they integrate ESG into their investment process. What does that mean for portfolio construction? What does that mean for the outcome for our members? Now, we still have processes that we follow on a regular basis. So when we have pre-selection stage and also on an ongoing basis.
 
So CFS follows a process of ESG integration across all of our portfolios. But we do also have some negative screens. Perhaps we can talk about that as well as the other active ownership processes.
 
Yes, we do have exclusions. In fact, we have an exclusion framework which is outlined very clearly in our responsible investment policy. We have a set of criteria that determines what should be our exclusions. Currently we have two exclusions that we apply into our portfolios. The first being that we do not invest in debt or equity of producers of tobacco, and secondly, the manufacturers of controversial weapons.
 
I must say that we strongly believe that engagement with companies is the most effective tool, and exclusion is only the final step in our active ownership process.
 
So you say that exclusion is the final step, but what are the things that we can do beforehand to avoid having to take that step.
 
Across our managers we may have a large holding in a company and this allows us to have some influence on how the companies run. So say when you buy shares in a company, you become a part owner in that company. And then as a part owner, you can vote on issues at the annual general meeting, such as nominating directors or ensuring that there’s diversity on the board and other ways.
 
And this is the process that we have a proxy voting provider to assist us with?
 
Oh, yes, that’s correct. Last year we appointed a proxy voting and engagement provider that is helping us to engage with companies in fact, global companies and also providing us with recommendation on how to vote. So this provider engages not only on our behalf, but also on behalf of a lot of global asset owners. So that means with that weight of monies behind them when they go and speak to a company, they can be really effective and influential.
 
Now to give you an example, imagine we invest in a company whose board is not a representative of the population or say if it lacks diversity. Now, given that we are responsible investor, we might consider that as an ESG risk. And as a shareholder of the company, our appointed engagement provider will try and have the discussion with the company and try and promote some change.
 
This engagement could involve attendance at board meetings, having asking some tough questions of the company’s management. However, it could also mean if the outcome is not satisfactory, they could go one step further and recommend a vote against the re-election of directors at the next annual general meeting. A really good example was last year at ExxonMobil. Two of the directors were replaced by the shareholders.
 
That was a big thing. In our view, proxy voting and engagement go hand-in-hand. And we strongly think and view that engagement more so collaborative engagement is a very effective tool. Now, being mindful that this doesn't happen overnight. It takes a long period of time, but is quite effective.
 
And I think that’s an important point. As a long term investor, CFS has the opportunity to participate in change that may take several months or even years to eventuate. Now, as well as ESG integration and active ownership, we also make specific mention in our beliefs to climate change stating that we believe climate is a financial risk that will have economic and social impact and needs to be managed.
 
Can you expand a bit more on that?
 
Yes sure. As a super fund and wealth manager, we are in a position to help lower emissions through the way we manage money, the choices we make for our members and also the investment managers that we work with. We know that climate change is important to many of our members, and we want our investments to be working hard to actively reduce climate risk.
 
And that’s why it’s one of our biggest priorities. Now, last year, we made some commitments. We committed to transitioning CFS investment portfolios to net zero greenhouse gas emissions by 2050. This target aligned CFS to the Paris alignment goals that will limit global warming to well below two degrees. It is also consistent with international scientific research. We have also made a medium term commitment to reduce greenhouse gas emissions by 30% by 2030. Now to implement this 2050 and a medium term target we have come up with a climate action plan. However, we need to be mindful that as data keeps improving, that is data from the companies keeps changing, as our investment portfolios keep evolving. We need to continuously review our targets and our action plan, as well as working with investment managers to reduce the carbon emissions in our portfolios. We are collaborating with other investors globally through our membership of various initiatives such as IGCC, that is the Investor Group on Climate Change and Climate Action 100 plus.
 
Now, I'm sure our members have heard about net zero commitments in the media. But to be clear, this shouldn't be seen as a call to divest from all energy companies. At CFS, we want to encourage these companies to provide us with a just transition to a low carbon future, and we want to continue to invest in those companies and that labor force that are moving into renewables and sustainable sources of energy.
 
Yes, indeed, especially with the issue of climate change. Divestment is not a solution. All that we’re doing here is passing the problem from one investor to the other. What we are doing is encouraging those companies that are currently high emitters of carbon to reduce their carbon footprint by being more efficient and where possible, to transition to a more sustainable way of doing the business.
 
It’s also worth noting that to exclude any kind of investment from our portfolios will reduce the opportunities available to our investment managers to make healthy returns for members. So we'd always prefer to guide change through engagement and voting. Yes, and because we practice ESG integration across all the investment portfolios at CFS, we’re considered to be a large investor with a considerable voting power. Therefore, through engagement, voting and collaborative initiatives, as I mentioned earlier with other large investors, we hope to make a significant impact on the emissions of the companies we invest in.
 
Now, apart from our climate initiatives, we have another area that is very important to us, but may not be something our members think about. I'm talking here about our modern slavery framework. Why is this so important to us.
 
Well modern slavery isn't something that is front of mind for most of us. Unfortunately, it’s a fact that is more prevalent today than ever. Now, what I'm talking about here is any kind of forced or bonded labor, child labor, force marriage. In fact, any situation where the victim or a person is not free to walk away.
 
And this is something that is occurring globally, not just in developing markets.
 
And yes, that’s sadly the case. It’s estimated that over 14 million people today are in slavery, and many of them, sadly, are women. And children.
 
Now, that is really sad, but how is it important to the investments that CFS makes?
 
Any company that profits from using forced labor is doing so illegally. Unfortunately, that doesn't mean it isn't happening. At CFS we believe modern slavery has no place in society and we share the responsibility to eradicate it as a matter of priority.
 
And due to new modern slavery legislation in Australia, CFS is required to report on our efforts to identify manage and mitigate modern slavery in our supply chains and operations. Now today we have agreements with more than 79 investment managers, with each of those investment managers having their own operations and supply chains to consider. So it’s a complicated undertaking. Within the responsible investment team we’re also analysing all of our holdings across CFS to see where our highest risks of modern slavery may be, whether this is due to the country it’s operating in or the industry that the company is part of. We can then engage with the managers that own those companies to understand how we can mitigate those risks.
 
That sounds like a lot of work that we are doing across all our holdings.
 
Well, it is, and it’s not something that will be solved overnight, but we’re collaborating with other organizations and investors to tackle this problem collectively to drive modern slavery out of society.
 
And that’s great to hear that we can be making a difference and making an impact. But there might be some members who are quite passionate about responsible investment and don't believe that CFS is doing enough here. What would you say to them?
 
Well, this is always a balance when our members hold individual values and beliefs, what may be considered ethical for one member may be unethical for another. To cater to our wide base of members we do not place restrictions on what our funds are invested in. With the exception of our stated exclusions that we mentioned earlier, which are tobacco and controversial weapons producers.
 
So it should be assumed that any other investments that are legal in nature may be held by any of our managers unless they specifically state in the product disclosure statement that they do not invest in a particular area. Now, having said that, most of our managers are signatories to the UNPRI, that is the United Nations Principle of Responsible Investment as we are and are factoring in ESG risks into the investments to some degree.
 
And for those members who want more, we do offer some ESG focused options on the platform. As you can see on the screen we currently have 11 ESG focused options across different asset classes. This includes bonds, domestic equities and global equities.
 
So at CFS, our intention is not to determine what is and is not ethical but to apply a minimum standard focused on managing human rights, climate change and environmental risks. And then over and above this base level, we offer ESG focused options. There are a lot of aspects that CFS needs to consider as an investor, and it’s rarely a simple case of a good or a bad investment.
 
What would you say was the key purpose of Responsible Investment?
 
At its core, Responsible Investment is all about managing risk and seeking opportunities to select investments that lead to the best possible risk adjusted returns for our members. There is research and we believe that taking ESG factors into account when making investment decisions actually leads to better outcomes for investors over the long term. I think there has been a myth for many years that considering ESG factors comes at a cost to performance.
 
We don't agree with that. At CFS, it is our commitment to deliver the best possible risk adjusted returns for our members, and that’s why integrating ESG is at the core of our investment decision making process.
 
Thanks Guneet. And now let’s go to the questions our members have sent in. Okay. The first question here is as climate change progresses, we have seen catastrophic bushfires that killed billions of animals, over 30 people and destroyed much property. The science insists that no new thermal coal mines or gas fields should be developed. Do you intend to stop investment in companies that are not following the science, perhaps giving them some warning beforehand?
 
And also linked to that, ones come in saying, asking rather, why invest in fossil fuels?
 
Thanks, Caroline. As I mentioned, early, it’s one of our beliefs that climate change is a financial risk that’s going to have economic and social impacts. With that we definitely believe that divestment is not the solution. That just means that we are transferring the problem from one investor to the other investor. What we need is engagement, engagement with those companies, engagement with those companies that are high emitters and we’re doing it in a few ways.
 
Firstly, we’re speaking to investment managers who are close to those companies to have those dialogs with those companies and see what they’re doing. And also, as I mentioned earlier, we had appointed an engagement provider, now that provider is now speaking on behalf of us and a large number of asset owners to those high emitters to those companies to make sure that they make their climate commitment, the net zero commitment and also engage with them on what is their climate strategy, what are they doing over the next five, ten, fifteen years to actually address this risk.
 
And obviously, for those companies that want to decarbonize, that’s not going to come cheaply. So if we were to starve them of capital by not investing in those companies, they wouldn't then be able to make that next step. Totally agree. The next question, what is the cost saving in investing responsibly and linked to that, will investing my super responsibly have an impact on my return?
 
That’s a good question. Now, there’s always been this myth that if we give consideration to ESG factors, is going to come at a cost of performance. We don't agree with that. In fact, there was research done by RIAA that’s the Responsible Investors Association Australasia in 2019 that says that ESG focused funds have actually done better or if not equally, some of the non ESG focused funds.
 
And also we have seen during COVID that some of those companies that have actually adopted some of these responsible investment practices have done really well. And I also want to say that it’s not only about returns it’s about risk. So it is that risk that we have been seeing that today markets are really penalising companies if they’re not taking account of any of those factors.
 
If the governance is not appropriate, if they’re not giving any kind of social considerations. So that’s going to impact the performance of those companies. And that means returns for us and our members.
 
Can't agree with you more on that. And the next question is, why does CFS invest in companies that may be seen as controversial?
 
Given the diversity of our members we don't generally take a position or make a judgment of an ethical nature, but there may be circumstances where we believe it is appropriate to take action for investments. Now, we do this by being an active owner, as I mentioned earlier. That is, we use our right as a shareholder to engage with and vote on how those companies operate in its business.
 
Engagement is a tool, a very effective tool, but it takes a long time. And there are instances where voting isn't able to achieve a desired outcome. The only option may be to divest. However, as I said, earlier, that’s the last resort for us.
 
And some questions coming through now from the audience. How can my portfolio be protected against the volatility induced by social activism that leads to policy changes by governments around the world?
 
That’s a good question. Now, legislation and regulations are always changing globally, and also we've seen closer to home in Australia. However, I would say that activism as question is not the only contributor to volatility in the market. There are many other drivers. Say for instance, it could be the Federal Reserve announcing a change in its interest rate policy, it could be inflation, it could be geopolitical risks, and it also could be the pandemic, as we've seen that. Now, when we in our investment processes, when we account for volatility, we account for all these things and also give consideration to ESG factors.
 
And I think that’s why we at CFS look at ESG as a process, an investment process and integrate it into our investment process rather than looking at it as something that helps us decide what is a good or a bad investment on some kind of ethical scale.
 
Totally agree.
 
Now, I have another question coming in here where a member would like to know what local and international ethical investment CFS has made. Good one.
 
It’s always difficult to call out ethical investment, as that implies on a judgment, what is ethical? However, if we were to go back to the first question asking about fossil fuels, CFS has a number of companies where we intergrate opportunities that are related to this energy transition. An example of this is in our infrastructure portfolio. Sorry this is our direct infrastructure portfolio where we have an investment in Terra-Gen.
 
This is a US based company that addresses the impact of climate change and in fact takes advantage of the opportunities that this whole energy transition is presenting itself today. 100% of the company’s portfolio generates electricity renewably, that is using wind, solar and batteries. Closer to home, we have an investment in Atmos Renewables that was acquired last year. Now Atmos consists of interest in six operational wind farms in southern Australia.
 
And the investment will provide a strategic entry point for this manager to the Australian renewable sector. These investments show that we have opportunities and there are many of them that are investment managers through the portfolios, through the investments are going to take and invest in those companies. However, at the same time through engagement, through talking to companies, they’re also influencing through changes in whether it is the appointment of directors whether to see the diversity of the directors or whether it’s closer to home,but that comes to climate change. They’re making sure the companies come up with a net zero commitment, ensuring that companies are coming up with a climate strategy and they’re holding them up against those commitments.
 
Thanks, Guneet. And I think we've got time for one more. And this question is asking us how easy is it or how do you go about comparing companies and therefore investments across different industries?
 
That’s a really good question. Now, data in the ESG world is, of course, an issue. We have a number of providers who are providing us with environmental social governance data across individual companies, which when you put them together, it is for individual industries and then it is for us and also our investment managers to account for those data when they value a company.
 
But it is not easy, in fact, when it comes to climate, it is even more difficult. The different ways to the way they can capture, say, the carbon footprint of the companies. What are the companies emitting themselves? What are the different, you can say the different tools that they’re using or the different resources that they’re using as different inputs that are coming into the business?
 
What are the carbon footprint of those? It’s not very easy. And however, having said that, I like to say that even though the data is not perfect, even though we know any measurement we’re doing is not perfect, perfection should not be the enemy of the good. We should all take action. And that is the only way we can address some of these risks, especially climate risk.
 
Well, thank you Guneet. We hope we've answered most of your questions today. However, some relate to personal circumstances which can't be addressed during this webinar due to privacy restrictions. For personal enquiries about your super account call us on 13 13 36. If you want to talk to a financial adviser before making decisions about your super, we have a website that can help you find an adviser in your area.
 
This website allows you to search for a financial adviser who has an agreement to distribute Colonial First State products. Please note that this website does not provide a complete list of all financial advisers in Australia that can provide advice. To visit the website go to cfs.findadviser.com.au. Finally, I'd like to thank you for joining us today.
 
I hope we've given you a better understanding of our approach and some insight to the ever evolving area of responsible investment in order to help you make more informed choices about your super. As always, we’re here to help. If you have any questions about our initiatives on responsible investing, or your account, visit our website cfs.com.au, call us on 13 13 36 or email us at contactus@cfs.com.au. You’ll receive a survey shortly on this webinar and we would be grateful if you would complete the survey as we’re keen to receive your feedback on this webinar and your suggestions for future webinars. Thank you and have a great day.

How did 2021 financial markets and my fund perform?

Hear directly from Todd Stevenson, Chief Customer Officer and Scott Tully, General Manager of Investments about:   

  • How the financial markets performed this year and our insights for the start of 2022
  • The latest returns for investment options with different risk/potential return characteristics
  • How to find the asset classes that make up your super investment options
  1. Todd >>Good afternoon everyone and welcome to our first "I want to know" webinar series.

    Before we get started and in the spirit of reconciliation, I want to acknowledge the traditional custodians of our country throughout Australia and pay my respects to the elders past, present and emerging. 
    My name is Todd Stevenson and I'm the Chief Customer Officer here at Colonial First State and today I'm joined by Scott Tully, General Manager of Investments to discuss how financial markets have performed in 2021 and how your fund has performed. First I want to say a few words about Colonial First State as your Super provider. At CFS we adopt a member-first approach. That means that everything we do is about driving and optimizing your benefits within the fund. And that means we’re focused on service and your experience. We've started this series to help you learn more about your Super and share with you the tools that are available to you to help you make better and more informed decisions. Today’s webinar is a good opportunity for you to hear directly about how financial markets have performed, the latest returns for your investment options, understand a bit more about asset classes and how your Super is invested and then where to go for more information and help. I want to acknowledge that you may have heard some news lately about CFS and your future, your Superannual performance test.
    It’s important to note that that related to the First Choice Employers Super, MySuper Life Stage options that didn't pass the test. Whilst First Choice Employers Super did not pass the test, I want to assure you, each and every one of you here today that your First Choice Personal Super, and your First Choice Wholesale Personal Super were not impacted by the test whatsoever. In fact, a number of the options that you hear about from Scott today have been some of the top performing investment options for the FY21 financial year, and you’ll hear more about that shortly. In addition to strong performance, we’re also continually investing in our services and the experience. And I'm really pleased to let you know that we’re consistently named amongst Australia’s best retail Super funds. In fact, we've recently been named winner of the Roy Morgan customer satisfaction award, winner of the Chant West Superfund award, and winner of the Binder Superfund award for First Choice Wholesale in 2021. And as the largest pair of retirement pensions in Australia, we’re committed to delivering that scale and the benefits of that scale back to you. We've recently lowered fees for 770,000 of our members, saving them over $215 million dollars in the last two years alone. That means you've got more for your retirement going forward. For those members in First Choice Wholesale Personal Super, we offer some of the lowest administration fees for balances up to $250,000. Again, saving you more for your retirement. We know that Super can be one of your biggest assets as you retire. So we want to help you maximize your retirement at every stage of your journey. So now let’s turn to Scott who will take us through how financial markets have performed and how your investment options have specifically performed of late.
    Over to you Scott.
    Scott >>
    Thanks Todd. We've come through quite an extraordinary period in financial markets, and I just want to start with giving a recap on where the major markets have performed in the last one, three and five years. On the screen here, we've got the returns for five asset classes - Australian shares, global shares, cash, Australian bonds, and global bonds. They’re the main asset classes that you’ll typically find in the portfolios in which you’re invested. The extraordinary thing over the last 12 months, and if we look at the numbers on the left hand side of this chart, is the strength in return of equity markets. So you can see there that the Australian and global equity markets have returned somewhere around about 30% in the 12 months to the end of October. So that’s quite a phenomenal return. That is of course off the back of the early stages of the pandemic when markets fell quite substantially in March of last year. But the important thing is, if you look on the middle and the right hand side of these charts, you can see that if you take a longer term view  that the return the markets have delivered have still been quite healthy. And if you look on the right hand side there, you can see that the Australian equity market has delivered around about 10% per annum over a five year period.
    So despite that volatility that we experienced in the beginning of 2020, markets have delivered to investors over the long term. And of course, that’s very important for you as a superannuation member, because that is where your superannuation will typically be invested.
    So let’s break that down a little bit. This new chart here shows the return of Australian equities and global equities. It takes the same starting point for both and then shows how those markets have compared relative to each other. So, we look in the middle of the\ chart here, we can see that dark blue line, which is the Australian equity line, and the light blue line which is representing global equities. Both fell quite substantially. That was in March 2020. That was in the period when governments started to lock down the economy, and there was a great deal of uncertainty to investors as to what that meant for the value of companies in which they are invested. And if you don't have certainty around whether a company will make money in the future or even whether that company will exist in the future, then obviously you’re going to pay less for its share price. Towards the end of March 2020 governments and central banks stepped into the market and into the economy and started to provide support. In the Australian case, the federal government introduced things like Job Keeper and Job Saver. The Reserve Bank cut interest rates. And what we saw then was that the confidence that markets had in the economy started to lift.
    As a consequence, share prices rebounded. And you can see that on the right hand side of this chart, where you can see that the value of an investment in the equity market started to pick up. The interesting thing out of this chart was how strong global equities have delivered. So that light blue line has recovered even more strongly than the Australian market. The Australia market has done very well. Global markets have done even better.Cumulatively over that three year period, you can see that investment in equities has delivered positive returns for investors and for you as a superannuation member. So that’s a good story, and it just reminds us that periods of volatility in equity markets happen. Markets go up, markets go down. But in the long term, typically, markets have recovered.
    Todd >>
    I think the other thing to note there, Scott, is the Super is long-term investment even if you are in the pension stage or move into pension.
    You might still be invested for another 20 or 30 years, so it is important that people take a long term view.
    Scott >>
    Absolutely. And that’s probably a key message that you have to be invested for the long term. But you also have to recognize that markets will go down occasionally, and that comes to your own personal view of risk. Are you comfortable when markets fall? But to give you some more comfort, I think this chart helps on that journey. But it hasn't all been positive. One of the interesting things here on this next chart shows what we call defensive assets - bonds. And the return that an investment in fixed interest or bonds has delivered to investors. The dynamic over the last couple of years has been, as you well know, the return you get from a deposit in the bank or the interest rate you pay on your home loan has come down substantially. Interest rates have fallen overall. But what’s happened in the longer interest rates?
    We’re talking here about returns if you lend money for three or five or ten years,
    is that the value of the bonds thatyou buy has fallen in recent times.
    That’s the function of the fact thatlong term interest rates have gone up.
    And without getting too technical,the higher the interest rate on a bond, the lower the price.
    So what we see in this chart is thatbonds have delivered positive returns
    for much of that three year period.
     
    For the last year or so, we see thatthe value of those bonds have fallen.
    Let me describe that in a slightlydifferent way.
    If we look at this next chart, this isthe return that all the interest rate that the Australian
    and the US governments pay on bondsif they are borrowing for a ten year period.
    So on the left hand side of thischart you can see that the US market, that dark blue line,
    the US government was borrowing atrates around about 2%
    The Australian government was alittle bit lower which is a bit of an anomaly,
    but that’s where it was.
    And then as that uncertainty thatcame through from the pandemic kicked in,
    those long term bond yields fell andthe price of bonds went up.
    That’s why that chart was positive tostart with. And it stayed very low for all of 2020.
    It basically meant governments canborrow at really low rates
     
    for quite an extended period of time.
    Beginning 2021, what we saw was that marketsstarted to get concerned about inflation.
    And when you've got inflation, thenthe bond market will expect to get a higher return
    because the value of that bond needsto compensate for the inflation component.
    We see here that the yields actuallywent up. Again, that means the bond price went down.
    And that has stayed, with a littlebit of variation,
    through 2021 at higher levels
    than it was in 2020.
    So you’re getting a higher interestrate,
    but you've gone through a periodwhere the value of that bond has decreased.
    But we are back to levels that arecloser to that pre pandemic level,
    not dissimilar to equity markets.
    The last market I’ll look at is thecurrency market.
    So we've got here the Australiandollar versus the US dollar.
    Typically, when equity markets andinvestment markets get concerned,
    the Australian dollar tends to godown.
    And we saw that in March 2020.
    We see here that the rate or theamount you’ll get for an Australian dollar fell
    so that 1 Australian dollar wasbuying less than 0.6 or 60 cents US.
    Subsequently as markets recovered,the value of the Australian dollar went up
    and it meant that you could buy moreUS dollars for your 1 Australian dollar.
    But again, we’re sort of back to thatpre pandemic level.
    It’s been volatile in that early partof 2020,
    but we’re at a higher level than wewere to start with.
    Why is that important?
     
    Well for your investments that areinvested outside of Australia,
    the value of the Australian dollarchanges the value of those investments.
    Okay, so that’s a recap on markets.We've seen the recovery in equity markets,
    we've seen bond markets rise and thenfall. We've seen the Australian dollar come back.
    What does that mean in terms ofreturns?
    I'm showing here the returns of arange of funds that Colonial First State offers you
    and that you are quite possiblyinvested in.
    There’s sort of three categorieshere.
    We've got fixed interest Australianshares and global shares.
    And within each of those categorieswe've got different funds.
    I'm showing here some activelymanaged funds, and I'm showing some index funds.
    Now, there’s a lot of numbers on thischart. But let’s just look at the one year table.
    And let’s look at the returns forthose different categories.
    The top group here, fixed interest.
    You can see that over one yearthere’s actually been
    a negative return on an investment infixed interest over the last year.
    And that reflects that data I wasshowing you before,
    which shows that the value of bondshas fallen in the last year.
    But importantly, and let’s look atthree and five years time,
    and towards the point aboutsuperannuation being a long term investment,
    you can see that over three years andover five years
    those funds have returned positiveamounts.
    They’re not large positive amountsbecause interest rates are quite low
    but that longer term return has beenpositive.
    Let’s look at the next two categoriesof Australian shares and global shares.
    This is where you see the returnscoming through
    to members and potentially in yoursuperannuation
    You can see that Australian sharesover the last year has returned nearly 30%
    And these numbers, by the way, areafter fees and after superannuation tax
    So these are net, this is what youreceive.
    You can see Australian shares has hadnearly 30%, 27%
    But more importantly, over fiveyears,
    you can see the returns there closerto that 10% mark per annum.
    Global shares has ever been stronger.You've got about the same return over one year.
    But over that five year period, as Ishowed you earlier in that chart,
    quite strong double digit returnsafter fees after taxes,
    just reflecting the strength ofinvestment markets over that period of time.
    Again, if you’re a superannuationmember and you've got a long term time horizon,
    then that has been of great benefitto you.
    Now, many of our members don't investin individual investment options like that.
    They typically invest in a fund thatpackages up all the investment classes, the asset classes.
    So I'm showing here three of theColonial First State series of funds
    that we offer to you as our members.
    And each of those series I'm showingthree different funds.
    The conservative fund, the moderatefund, the growth fund.
    The difference between conservative,moderate and growth is basically
    how much money you have invested in theshare market.
    So if you’re in the conservative fundas the name sort of implies,
     
    then you have less money in the sharemarket and more in bonds
    because the volatility, or themovement, the ups and downs
    in terms of the returns from thatfund, should be less than if you’re invested in,
    for example, the growth fund whereyou have more money in the equity market,
    you have more volatility, but ideallyyou should get longer term returns from those investments.
    And you can see that’s come through.
    Todd >> I think this is areally important slide just to pause on.
    And the reason for that is we get alot of questions from our members,
    and many that have come throughasking us, "how has my Super performed?"
    What’s really important there is tounderstand, well, how is your super invested?
    So one way you can do that is tocheck your statement or log into our online portals.
    There you can see the differentinvestment options that your Super is invested in.
    And then here you can actually seehow some of those have performed.
    The majority of our members do haveexposure to, whether it’s
    the First Choice Wholesale moderateor the growth option here on the table.
    But I really do encourage you to goand check your personal circumstances to identify
    how your Super is invested and thencheck how it’s performed.
    Scott >>
    Absolutely. That’s critical, Todd.Good point.
    The numbers are on the screen. Youcan see what they've delivered.
    The funds with the dashes just meansthose funds haven't been in existence for as long.
    So let’s look at the top line whereyou've got a full series of returns.
    Our Growth Fund over five years, 8.6%per annum after fees and tax.
    Our Conservative Fund, 4% per annumafter fees and tax.
     
    What you can't see out of this is thevolatility that we experienced in March 2020.
    But the important thing is that
    the returns are commensurate with therisk that people are taking.
    So again, the question, "howhave we been performing?"
    Look, it’s really about the risk thatyou’re comfortable in taking, the fund that
    you’re invested in and then theindividual strategy.
    The strategies are different.
    But broadly speaking,
    the direction of returns is similarin all these different funds.
    Todd >>
    And I will reiterate again that
    these funds here that are presentedto you were not subject to
    the "Your future, yoursuper" performance test, and you've not been affected by those results.
    Scott >>
    Absolutely. So what does that allmean?
    That’s the past. We've looked at whatmarkets have done.
    We've looked at what they've meant foryou as a superannuation member, an investor.
    So what’s the outlook?
    There’s probably some key things.
    We've seen that economies haverecovered strongly out of the back of the pandemic
    or about how the lockdowns that wehad.
    But of course countries, andAustralia in particular, and overseas as well, have come
    in and out of lockdowns but marketshave started to look through that because they
    have comfort that governments andcentral banks are understanding what to do.
    So we’re sort of broadly comfortable thatthat recovery will continue.
    Vaccinations have obviously been anenormous support
    to enable economies to reopen.
    So that has been a key piece
    But also in terms of returns, thataccommodative fiscal and monetary policy,
    which is a bit of a mouthful, butbasically, the level of interest rates in the economy
    and the amount of money thegovernment are spending to support the economy
    have been very supportive and grownthe economy,
    and therefore supported investmentmarkets.
    Inflation is a concern, both in positiveand negative ways.
    But we do expect inflation to behigher than it was.
    When you lend money at very lowrates, people tend to invest it and prices tend to go up.
    The question here about that is howhigh will inflation go over the next year or two?
    Central banks like the Reserve Bankand the Federal Reserve in the US, they've
     
    started to reduce the amount ofstimulus they’re putting into the economy
    but it’s still at quite a high level.
    So it would be interesting to see,and that’s a key conversation,
    maybe it would be interesting to seehow quickly they pull that out.
    And then finally, we've had someinteresting geopolitical issues.
    We've seen weakness in China. They'vehad some issues with energy shortages.
    They had some issues with a propertydeveloper over there.
    And some regulation that potentiallyis disruptive to markets.
    Look, there’s a range of things thatcan always impact investment markets.
    For you as a superannuation member,just keep that in mind.
    Markets will continue to go up anddown.
    They can be generally positive in thefuture, but there are risks involved.
    Going back to that point, it’s veryimportant to take a long term view,
    particularly with yoursuperannuation,
    particularly if you've got decades togo until you need that money.
    And taking that exposure to, orhaving the right investment strategy
    for your appetite for risk isimportant.
    But take a long term view would bethe key message, Todd,
    that I'd hope everyone takes away.
    Todd >>
    Thanks for that, Scott. Very insightful.
    You spoke about the outlook forfinancial markets.
    And we’re going to go to a Q&Anow.
    One of the questions that has comethrough for a number of our customers or members
    has been "how should I invest mymoney going forward?"
     
    Scott >> It’s a commonquestion, Todd, as we hear regularly from our members.
    The key thing around investing is tomake sure that you have, first of all, your objective in mind.
    So what are you trying to achieve?
    Think about the time frame thatyou’re trying to invest for.
    Again, as we talked before, is it along term investment, is it a short term investment?
    We’re talking about superannuation,it’s typically a long term investment.
    And then set the investment strategythat you've got
    in a way that you’re comfortable withthe risk in that.
    That’s a hard thing to quantify. Butif you look at sort of historical ups and downs in markets
     
    and what that’s meant forsuperannuation funds
    how much of that are you prepared totolerate?
    And then invest in one of thoseinvestment options that I showed you before,
     
    or from the rest of the menu, thatsuits your risk profile.
    That’s about as good as I can do,Todd,
    without giving advice to hundreds ofpeople simultaneously.
    Todd >>
    That’s right. And you spoke aboutadvice there.
    And one of the best ways that you canset your investment strategy is
    to work with a financial advisor. AndI’ll cover off shortly how you can
    get in touch with an advisor, shouldyou wish to work with one going forward.
    One of the other questions that’sjust come through, and again we get really frequently was
    "how does CFS compare toindustry Super funds?
    Scott >> Colonial First Stateoffers a range of investment options.
    But let’s take two of our biggestfunds.
    There’s First Choice moderate andFirst Choice growth.
    These are funds that we talked aboutbefore,
    and I showed you the one, three andfive year returns.
    It’s always difficult comparingfunds, but I would say the First Choice modern and
    First Choice growth have performedwell, very well, compared to the full list of industry funds.
    So if you rank them from top tobottom, we’re in the top quarter,
    the top quarter over an extendedperiod of time for the returns of those funds.
    So I think we have delivered goodvalue to our members, and that return that they've received
    has been commensurate with the riskin each of those portfolios.
    Todd >> Yeah, I think the otherthing to note when comparing your Super to any fund is
    not only investment performance, butalso things like fees,
    the services available to you, suchas your online or digital services
    and the experience that you’reprovided with.
    So ensure that you’re comparing likewith like and apples with apples
    And I know one of the key benefits ofmany of our customers that come to us
    via Commonwealth Bank is that theycan see their balance in their Netbank environment.
    And I know that that is a huge amountof value to a lot of our customers or members,
    that they can see their balance on adaily basis.
    And I know there’s not too many otherfunds that can deliver or do that.
    Another question that’s just comethrough to us, and again is very topical at the moment,
    particularly if you anywhere aroundAustralia, to be fair, is the housing market
    What do we see going forward for thevalue of the housing markets?
    Scott >>
    Good question. I’ll just step back alittle bit.
    The reason why share markets and
    the housing market and similarmarkets have been doing so well,
    or one of the reasons, is becauseinterest rates are so low.
    So if you are a prospective homebuyer and you’re borrowing at 2% or 3%, depending on
     
    where we are today to borrow at home,you can afford to borrow more, or you can
    borrow more for the same repaymentscompared to say, five years, ten years,
    twenty years ago, if you’re oldenough.
    So that has meant that people haveinvested money in
    equity markets and housing markets,and the price has gone up.
    So the question is actually, what’sgoing forward now?
    I'm not going to make a predictionaround the future direction of the housing market precisely.
    But it seems like interest rates arestarting to tick up. So that’s going to increase the cost for people to borrow.
    Doesn't mean housing markets aresuddenly going to fall over or anything
    But it’s going to make it a littlebit harder for people to get into the market.
    00:25:20,880 --> 00:25:23,880
    Personal, I would suggest that
    you’re not going to see a repeat ofwhat we had in the last 12 months, but let’s see.
    Again, people need to be careful whenthey make an investment - can they afford it?
    Can they manage the volatility? Thatsort of thing.
    But I don't think you would expect tosee the same increasing house prices
    that we did over the last year.
    Todd >> Very good.
    And final question here that’s comethrough is - and obviously directed for you again, Scott, is
    Does CFS offer thematic type ofinvestments? And by that I mean,
    do you offer ability to invest in lowcost investment options?
    Environmental or sustainable options?And Cryptocurrency?
    Scott >>
    Okay, so let’s take a few of those.
    So the First Choice, either wholesalePersonal Super, or Personal Super product
    that you’re invested in offers a verylarge range of choices.
    Lots of investment options you canchoose.
    There are definitely thematic optionsin there. There’s a technology option, there’s a
    health care option, there’ssustainability options.
    So there’s a range of investmentoptions there.
    I would suggest going to
    colonialfirststate.com.au,
    download the product disclosurestatement.
    Look at the investment option menuyou can see there.
    Comes to Cryptocurrency, no, we don'toffer a Cryptocurrency investment at the moment.
    I won't make a comment on the valueor the merits of Cryptocurrency,
    but it is a difficult asset to beable to administer.
    And there’s a risk in administeringcryptocurrencies
    And one thing we don't want to do
    is not get the administration of theinvestments that you make on our behalf wrong.
    We want to get that right.
    So, no crypto at the moment.
    Todd >> Well, thank you forthat, Scott.
    We’ll conclude the Q&A there.
    And we’ll move into, where can youfind more information?
    If you are after more information, wewill be hosting further seminars into the future.
    So please keep an eye out for furtherinvitations.
    But don't wait until then. There’scertainly more information available to you
    on our CFS website, where you canfind out about our funds, the investment performance,
    and a number of content or articlesto answer some of the questions we didn't get to today.
    I mentioned earlier, you can alsofind out about how your Super is invested
    and should you choose, make a changeon our First State investor platform
    and also via the Colonial First Stateapp.
    And if you haven't yet downloadedthat,
    you can do so via the Apple appstore,
    or the Google play store.
    And I really encourage you todownload that so you can check your balance on a regular basis.
    And I also mentioned that, should youwish to work with a financial advisor,
    we do offer what’s called our"find an advisor" tool.
    You can go to our website, look upthat tool, and there you can enter in your search criteria,
    whether that’s based on your postcode or a type of advice that you’re after.
    And we can connect you to a number ofadvisors that you can then filter
    and search through to see who wouldbest meet your need.
    Or alternatively, you can certainlyemail us or give us a call,
    and again we can put you in touchwith a financial advisor.
    Now that concludes today.
    I really hope you've enjoyed Scott’ssession and the content presented.
    Please keep an eye out, as I said, forfuture sessions and we’ll also be sending you
    a feedback form, because we'd loveyour feedback
    in terms of what you'd like to hearfrom us going forward.
    And I want to thank you for being amember of Colonial First State,
    and I really hope that we can continueto serve you going forward.
    I think it’s really important to notethat this presentation is general advice only. That means we don't take into consideration your personal circumstances. Should you wish to seek personal advice, we recommend you talk to a licensed financial advisor.

Investing in super

How is super different to a savings account? This video explains how your super grows not only by regular contributions, but by your super fund investing this money across a range of asset classes.

INVESTING IN SUPER

Super helps you save for retirement, but it’s not like a savings account. While savings can grow through regular contributions and interest on your account, super grows differently. It grows not only through regular contributions, but by investing your money into a portfolio of assets, which may mean your balance can fluctuate over time.

By investing your super, your super fund works to generate returns from those assets to help increase the amount of savings you have when you reach retirement, making your super an investment in itself.

Wherever you stand on investments and super, we’re here to help you get to where you need to be. Click through for a more detailed explanation of how investing for super works.

Consolidating your super

Why is it important to consider consolidating your super? This video explains why having all your super in the one place might make sense and what you should consider before consolidating accounts.

You've probably heard that it’s a good idea to put all your super into one account.
But do you know why this is, and what’s actually involved with consolidating your super?
In this video we’ll explain how it works and discuss why having all your super in the one place can help you build up your balance faster. We’ll also look at some of the things to be aware of before you make any changes.
More and more, Australians are realising the advantages of putting their money into one super account. According to the Australian Tax Office, there are many people who still have two or more super accounts.This might be through your choice or simply as an unintended consequence of a change in circumstances such as starting a new job.
Before we get started, it is important to understand that while consolidating your super into one account is a good idea for many people, you should check that this is the right option for you. Some accounts may have exit penalties, offer insurance or other benefits that once cancelled, can't be reinstated. We’ll talk more about this later in the video.You might be wondering why it matters how many super accounts you have and the simple answer is, having only one account will stop you paying unnecessary fees.
Fees will vary between different providers but most will charge an account-keeping or administration fee as well as an investment fee.
There may be other fees for transactions, advice and if you have insurance through your super, you’ll also have insurance premiums that will deducted from your account or in some cases paid by your employer.
Your fees may only be a small percentage of your super balance, but if you have two accounts, you’re paying two lots of fees – or three lots if you have three accounts and so on.
By consolidating all these accounts into one, you’ll avoid these extra fees, which means you could have more money at retirement.
To make it a bit easier to compare the fees you are paying, most funds will provide a 'total cost or total fees paid' amount on your annual statement.
Having fewer accounts also means you’ll receive less paperwork, like your super statements and fund reports, so it’s easier to keep on top of everything.
And with only one fund to follow, it’s easier to understand how your super is invested and how it’s performing.  
You can check your FirstChoice Employer Super investment strategy and performance by taking a look at the investment section of your super statement, by logging on to FirstNet, or by downloading the Colonial First State member app.
You might have a couple of super accounts that you know of, but it’s also possible to have other accounts you've forgotten about altogether.
This can happen if, for example, you change your name or you change jobs and your employer starts paying your contributions into a different super account. 
It’s worth looking into, because it could be a significant amount of money. In fact, it’s estimated that the ATO holds a whopping 20.8 billion dollars in lost and unclaimed super.
To check if you have any other super, log into your myGov account. Once you’re logged in, click on the ATO section, go to the 'Super' tab and then check your super account details to see if the ATO is holding any super on your behalf.
If you don't have a myGov account, you can create one at www.my.gov.com.au.
There are a couple of different ways to consolidate your super. You can do this through the mygov website or we can assist you. Simply complete the 'Consolidate my super' form, which can be found on our website and post back to us. You can also call us and we can step you through the process without the need for any paperwork.To speed things up, make a note of the super accounts that you have, including the account numbers and the name of the fund, as we will need this information to consolidate your different accounts. Once you are ready to proceed, we’ll get in contact with your other super providers and take care of everything.
We mentioned earlier that there are some important things to be aware of if you decide to consolidate your super. These include:
·       Checking if you have any insurance in the account you want to close, and how that compares with the account you want to move your super into. Consider things like the amount of insurance cover you need as well as the cost of the insurance. Moving your super might also limit your cover if you have existing medical conditions.Some funds like Colonial First State, may also allow you to transfer your insurance without requiringadditional medical evidence. Give us a call to find out if this is option isavailable to you and to discuss any conditions that may apply.
·      Compare the costs, risks and benefits of your other super fund, take into account things like fees, exit penalties and any investment or tax implications.
-    Talk to a financial adviser before rolling out of a super fund with defined benefits, or special benefits that some government funds provide.
Now that you've learnt a bit more about the benefits of consolidating your super, you may be interested in some other tips on how to make the most of your super.
A great place to start is our boosting your super video.
And remember, we’re always here to help you with any super questions you have.
Thanks for watching.
Disclaimer – as per wording below
 
 
 
 

 [JC1]Arielle,this is the voiceover changeYou've probably heard that it’s a good idea to put all your super into one account.
But do you know why this is, and what’s actually involved with consolidating your super?
In this video we’ll explain how it works and discuss why having all your super in the one place can help you build up your balance faster. We’ll also look at some of the things to be aware of before you make any changes.
More and more, Australians are realising the advantages of putting their money into one super account. According to the Australian Tax Office, there are many people who still have two or more super accounts.This might be through your choice or simply as an unintended consequence of a change in circumstances such as starting a new job.
Before we get started, it is important to understand that while consolidating your super into one account is a good idea for many people, you should check that this is the right option for you. Some accounts may have exit penalties, offer insurance or other benefits that once cancelled, can't be reinstated. We’ll talk more about this later in the video.You might be wondering why it matters how many super accounts you have and the simple answer is, having only one account will stop you paying unnecessary fees.
Fees will vary between different providers but most will charge an account-keeping or administration fee as well as an investment fee.
There may be other fees for transactions, advice and if you have insurance through your super, you’ll also have insurance premiums that will deducted from your account or in some cases paid by your employer.
Your fees may only be a small percentage of your super balance, but if you have two accounts, you’re paying two lots of fees – or three lots if you have three accounts and so on.
By consolidating all these accounts into one, you’ll avoid these extra fees, which means you could have more money at retirement.
To make it a bit easier to compare the fees you are paying, most funds will provide a 'total cost or total fees paid' amount on your annual statement.
Having fewer accounts also means you’ll receive less paperwork, like your super statements and fund reports, so it’s easier to keep on top of everything.
And with only one fund to follow, it’s easier to understand how your super is invested and how it’s performing.  
You can check your FirstChoice Employer Super investment strategy and performance by taking a look at the investment section of your super statement, by logging on to FirstNet, or by downloading the Colonial First State member app.
You might have a couple of super accounts that you know of, but it’s also possible to have other accounts you've forgotten about altogether.
This can happen if, for example, you change your name or you change jobs and your employer starts paying your contributions into a different super account. 
It’s worth looking into, because it could be a significant amount of money. In fact, it’s estimated that the ATO holds a whopping 20.8 billion dollars in lost and unclaimed super.
To check if you have any other super, log into your myGov account. Once you’re logged in, click on the ATO section, go to the 'Super' tab and then check your super account details to see if the ATO is holding any super on your behalf.
If you don't have a myGov account, you can create one at www.my.gov.com.au.
There are a couple of different ways to consolidate your super. You can do this through the mygov website or we can assist you. Simply complete the 'Consolidate my super' form, which can be found on our website and post back to us. You can also call us and we can step you through the process without the need for any paperwork.To speed things up, make a note of the super accounts that you have, including the account numbers and the name of the fund, as we will need this information to consolidate your different accounts. Once you are ready to proceed, we’ll get in contact with your other super providers and take care of everything.
We mentioned earlier that there are some important things to be aware of if you decide to consolidate your super. These include:
·       Checking if you have any insurance in the account you want to close, and how that compares with the account you want to move your super into. Consider things like the amount of insurance cover you need as well as the cost of the insurance. Moving your super might also limit your cover if you have existing medical conditions.Some funds like Colonial First State, may also allow you to transfer your insurance without requiringadditional medical evidence. Give us a call to find out if this is option isavailable to you and to discuss any conditions that may apply.
·      Compare the costs, risks and benefits of your other super fund, take into account things like fees, exit penalties and any investment or tax implications.
-    Talk to a financial adviser before rolling out of a super fund with defined benefits, or special benefits that some government funds provide.
Now that you've learnt a bit more about the benefits of consolidating your super, you may be interested in some other tips on how to make the most of your super.
A great place to start is our boosting your super video.
And remember, we’re always here to help you with any super questions you have.
Thanks for watching.
Disclaimer – as per wording below
 
 
 
 

 [JC1]Arielle,this is the voiceover change

Boosting your super Part 1

How can I boost my super to help me enjoy the retirement lifestyle I really want? Relying on the contributions your employer makes might not be enough to achieve your retirement goals. This video explores some of the ways you can build your super, including salary sacrifice and personal contributions strategies, to help you enjoy the retirement you deserve.

A healthy super balance can help you have the retirement lifestyle you really want, when the time comes.

 

But just relying on the contributions your employer puts into your super, may not be enough. If you’re in a position to add a little more, it can help you out in the long run – and there are some great tax benefits as well.

 

There are so many great options to help boost your super, so we have divided this video into 2 parts. We’ll start off by looking at some of the ways you can contribute to super including;

 

 - a before tax option known as salary sacrifice.

 

 - Then we will explain personal contributions, a strategy to use after tax money to build your super

 

- And importantly, we will discuss some of the rules and guidelines around making contributions to super such as contributions caps.

 

 In part 2 of Boosting your super, you can learn more about

 

-             Government co-contributions

 

-             Spouse contributions

 

-             Downsizer contributions

 

-             The first home super saver scheme and

 

-             The importance of financial advice

 

 Don't worry if this all sounds very technical, we’ll explain each option and the benefits for you and your super.

 

One of the easiest ways to boost your super is through salary sacrificing. This is where you ask your employer to make extra super contributions into your account, straight from your employment income, before any tax is taken out.

 

This is on top of the compulsory contributions, they’re

already making for you.

 

As well as saving more for your retirement, salary sacrificing can be tax effective, as money that goes into your super is generally taxed at only 15%.

 

 How effective this strategy could be for you, depends on your level of income and individual tax rate.

 

 Regardless of the potential tax benefits, every extra contribution you make to super will help grow your retirement wealth.

 

Here’s an example of the kind of difference just a small amount could make:

 

Kim and Robyn were colleagues. From age 40, they both earned a salary of $80,000 a year.

 

Kim, who didn't salary sacrifice, ended up with a super balance of around $$341,235 when she retired at age 65.

 

Robyn decided to salary sacrifice 2.5% of her income each year, which meant she had around $25 per week less take home pay, but when she retired, her super balance was $397,859. That’s $56,624 more than Kim.

 

There’s no minimum amount required for salary sacrificing although there is a maximum you can contribute each year before you incur tax penalties. This is called the concessional contributions cap and we’ll talk more about that shortly.

 

Another great way to boost your super is to make personal contributions using your after-tax income. These contributions are in addition to the compulsory super guarantee your employer makes on your behalf.

 

There are two main types of personal contributions:

 

-             Non-concessional contributions and

 

-             Personal deductible contributions.

 

Let’s take a look at these options in a bit more detail.

 

 A 'non-concessional contribution' is money you add to your super that you have already paid tax on. Using after-tax money means there is no contributions tax payable on this amount. Say you've received some extra cash – like a bonus, tax return or inheritance. Or maybe your kids have finished school and you’re no longer paying school fees. Or perhaps your mortgage is finally paid off. You can contribute up to $100,000 each year of after-tax money – as long as your total superannuation balance is less than $1.6 million on the previous 30 June and from the first of July 2021, these thresholds will increase which means you can contribute even more to help grow your super.

 

Visit the ATO website and search 'Bring Forward Rule' for further information on this option.

 

 The second category of personal contributions are personal deductible contributions. In this instance, you can add to your super using after-tax money, but you also claim a tax deduction for this amount. This is considered a 'concessional contribution' and is subject to contributions tax, which is generally 15%, or 30% for high income earners. The benefit of this type of contribution is that you may be able to reduce the amount of tax you pay, by claiming a personal tax deduction. Your individual tax rate will determine how tax effective this could be for you.

 

 This option is available to a lot of people and is often used by self-employed, contractors and freelance workers who do not receive the compulsory super guarantee from an employer. It’s also available to eligible employees who want to boost their super and reduce their tax.

 

 To claim a tax deduction on your personal super contribution, you must meet the ATO eligibility criteria, as well as notify your super fund of your intention to claim a tax deduction.

 

Visit the ATO website to see if you are eligible and how these contributions may benefit you.

 

 It is important to remember that personal deductible contributions will count towards your concessional contributions cap that we mentioned earlier. Let’s look at this in more detail now.

 

 The cap is a limit on the amount of concessional contributions you can add to your super each financial year, without incurring tax penalties. The combined total of your 'concessional contributions', which includes your salary sacrifice contributions, employer’s compulsory super guarantee contributions and any personal contributions where a tax deduction has been claimed, can't exceed $25,000 per year. This amount will increase to $27,500 on the 1st July 2021. Check the ATO website to find out more about the different types of concessional contributions.

 

 Whilst it’s important to keep in mind the concessional contributions cap, there are some circumstances where you might be able to contribute above this amount.

 

The carry-forward concessional contributions strategy, or more simply put, 'catch up concessional contributions' allows you to put more into super if you haven't reached the general concessional contributions cap in previous years. There may also be the added benefit of being able to save on tax.

 

To take advantage of this option, your total superannuation balance must be less than $500,000 on the previous 30 June. 

 

 Let’s look at how this works: Zoe has taken time out of the workforce to care for her children and doesn't expect to return to work until 1 July 2021, when her total super balance will be about $50,000.

 

Each financial year since 2018, Zoe was not employed and did not contribute to super.  She is able to save her unused $25,000 cap each year.

 

So over 3 years, Zoe would have been eligible to contribute $75,000 into her super. When Zoe returns to work in July 2021, she can make a 'catch-up concessional contribution' of up to $102,500 using the 2021-22 cap of $27,500, plus the $75,000 of unused amounts from the previous 3 years. Her catch-up may include personal deductible contributions, salary sacrifice contributions or her employer’s super guarantee contributions.  Zoe is on a modest income, so she is not likely to contribute $102,500 in one year.

 

It’s important to remember that you can only accrue unused amounts since 1 July 2018 and catch up contributions only apply for a 5 year period.

 

For example, if Zoe doesn't use the $25,000 unused cap that she accrued in 2018-2019 by the end of  2023-2024, it won't be available in later years because that will be outside of the 5 year window.

 

 The new higher threshold of $27,500 will only apply for catch up contributions made after 1.7.21.

 

We have discussed a lot of information throughout this video. Each strategy is potentially a great way for you to boost your super, but it is important to remember that super is a long term investment and you will not be able to access it until you retire or meet a condition of release. There are also conditions and eligibility criteria that may apply so it is worth visiting the ATO website for further information about this.

 

If you are considering making an additional contribution to your super, we suggest speaking with a financial adviser who can review your personal situation and work out what is the best and most tax effective option for you. A financial adviser can also help make sure your super is invested to suit your life stage and risk preference to get you on track to achieve the

retirement you want. 

 

 And to find out more ways to grow your super, watch 'Boosting your super' Part 2.

 

 If you have any questions or would like more information about super, we’re always here to help.

 

 Thanks for watching.

Boosting your super Part 2

How can I boost my super to help me enjoy the retirement lifestyle I really want? In Part 2 of Boosting Your Super, we look at strategies to build your super balance to live your best life in retirement. This video also explores the First Home Super Saver Scheme as a savings option for buying your first home.

Small things you do today can make a difference to the lifestyle you’ll enjoy in retirement.But just relying on the contributions your employer puts into your super may not be enough. 

 

In Part 2 of Boosting Your Super, we’ll discuss strategies such as;

 

-         Government co-contributions

 

-         Spouse contributions

 

-         As well as downsizer contributions.

 

-         We’ll also explain the First home super saver scheme which allows you to use some of your super as a savings option for your first home.

 

A number of super strategies that are available to help grow your super have the added benefit of helping to reduce your tax, particularly for higher income earners. Importantly, there are also ways for people with modest incomes to boost their super and get some added benefits, such as government super co-contributions.

 

You need to meet the government’s eligibility criteria which changes from time to time, but if you qualify, you could receive a payment of up to $500 from the government into your super account.

 

It is easy; once you've lodged your tax return, the tax office will work out if

you’re eligible for a co-contribution. If you have made an after-tax contribution in the last financial year, the government will contribute a further amount to help give your super an additional boost. This happens

automatically.

 

 For more information and to see if you might qualify visit the ATO website.

 

Making a spouse contribution is  a great way to help boost the super of your partner, as well as help you to reduce your tax.

 

By making a spouse contribution you can earn a tax offset, also called a rebate of up to $540 in one year.

 

You may be able to take advantage of this tax offset if your spouse is under the age of 75 and earns less than $40,000.

 

To see if you might be eligible to make spouse contributions visit the ATO website.

 

If you are thinking of selling your home, you might want to consider making a downsizer contribution to your super. Downsizer contributions allow you to put some of the money from the sale of your home into super. You can contribute up to $300,000 and it won't count towards any of your contributions caps.

To qualify, you must:

·       be at least 65 years old

·       have owned your home for more than 10 years

·       live in Australia (and your home must be here)

·       own a home that’s not a caravan or other mobile home

The proceeds from the sale of your home must either be exempt, or partially exempt, from Capital Gains Tax (CGT). You need to make the contribution to your super within 90 days of settlement for the sale of your home. And you don't have to be working to make the contribution!

 

Perhaps your priority right now isn't to build your super, but to buy your first home. Did you know that your super account can help you do that?

With the First Home Super Saver Scheme, you can make voluntary before-tax and voluntary after-tax contributions to your super, to help save for your first home. You can then apply to withdraw these voluntary contributions, along with associated earnings when you are ready to

buy. The good thing about saving for a home through your super is that your earnings will only be taxed at 15%,  which is much lower than many people’s individual tax rate. This makes it easier to build your savings over time.

Again the ATO website is a great place to find out more about this option, as there are some very strict rules around when and how you can access this money.

Finally, seeking financial advice is an important strategy that may financially benefit you now and in the future. A financial adviser will review your personal situation and work out the best and most tax effective option for you.

 

They can also help make sure your super is invested to suit your life stage and risk preference to get you on track to achieve the retirement you want.

 

We have discussed a lot of information throughout this video.Each strategy is potentially a great way for you to boost your super, but it is important to remember that super is a long term investment and you will not be able to access it until you retire or meet a condition of release. There are also conditions and eligibility criteria that may apply so it is worth visiting the ATO website for further information about this.

 

If you have any questions or would like more information about super, remember, we’re always here to help.

 

 Thanks for watching.

Boosting your Super: Carry Forward unused concessional contributions

This video explains the carry-forward unused concessional contributions strategy, or more simply put, 'catch up concessional contributions' strategy. Find out how you might be able to contribute even more to your super and boost your retirement savings.

A healthy super balance can help you have the retirement lifestyle you really want, when the time comes.

 

But just relying on the contributions your employer puts into your super, may not be enough. If you’re in a position to add a little more, it can help you out in the long run – and there are some great tax benefits as well.

 

In this video we are going to discuss the carry-forward concessional contributions strategy, or more simply put, 'catch up concessional contributions'.

 

Before we get started, it is important to understand there is a limit on the amount of concessional contributions you can add to your super each financial year, without incurring tax penalties. Concessional contributions are contributions that are generally made into your super fund before tax. They are generally taxed at a rate of 15% in your super fund and the maximum amount of concessional contributions you can add to your super, without incurring extra tax, is referred to as the concessional contributions cap. Concessional contributions include the combined total of all your salary sacrifice contributions, employer’s compulsory super guarantee contributions and any personal contributions where a tax deduction has been claimed. The annual cap has increased to $27,500 per year as of the 1st July 2021. Check the ATO website to find out more about the different types of concessional contributions.

 

 Whilst it’s important to keep in mind the concessional contributions cap, there are some circumstances where you might be able to contribute more without paying extra tax.

 

The carry-forward concessional contributions strategy, or more simply put, 'catch up concessional contributions' allows you to put more into super if you haven't reached the basic concessional contributions cap in previous years. There may also be the added benefit of being able to save on tax.

 

To take advantage of this option, your total superannuation balance must be less than $500,000 on the previous 30 June. 

 

 Let’s look at how this works:

 

Zoe has taken time out of the workforce to care for her children and doesn't expect to return to work until 1 July 2021, when her total super balance will be about $50,000.

 

Each financial year since 2018, Zoe was not employed and did not contribute to super.  She is able to save her unused cap each year.

 

 So over 3 years, Zoe would have been eligible to contribute

$75,000 into her super. When Zoe returns to work, she can make a 'catch-up concessional contribution' of up to $102,500 using the current year cap of $27,500, plus the unused amounts from the previous 3 years. Her catch-up may include personal deductible contributions, salary sacrifice contributions or her employer’s super guarantee contributions.  Although Zoe earns a modest income, and unlikely to contribute up to the $102,500 limit using her income, she may be in a position to make a personal deductible contribution with funds from an inheritance, a bonus or an unexpected windfall for example. This will help to grow her super and she may also get the added benefit of a tax deduction for her personal deductible contribution.

 

It’s important to remember that you can only accrue unused amounts since 1 July 2018 and catch up contributions only apply for a 5 year

period.

 

For example, if Zoe doesn't use the $25,000 unused cap that she accrued in 2018-2019 by the end of  2023-2024, it won't be available in later years because that will be outside of the 5 year window.

 

This strategy is potentially a great way for you to boost your super, but it

is important to remember that super is a long term investment and you will not be able to access it until you retire or meet a condition of release. There are also conditions and eligibility criteria that may apply so it is worth visiting the ATO website for further information about this.

 

If you are considering making an additional contribution to

your super, we suggest speaking with a financial adviser who can review your personal situation and work out what is the best and most tax effective option for you. A financial adviser can also help make sure your super is invested to suit your life stage and risk preference to get you on track to achieve the retirement you want.

Boosting your super: Salary sacrifice

One of the easiest ways to boost your super is through salary sacrificing. This video provides a basic explanation of how salary sacrifice works as well as some of the potential tax benefits of this strategy.

One of the easiest ways to boost your super is through salary sacrificing. This is where you ask your employer to make extra super contributions into your account, straight from your employment income, before any tax is taken out

 

This is on top of the compulsory contributions, they’re already making for you. As well as saving more for your retirement, salary sacrificing can be tax-effective, as money that goes into your super is generally taxed at only 15%.

 

How effective this strategy could be for you, depends on your level of income and individual tax rate.

 

 Regardless of the potential tax benefits, every extra contribution you make to super will help grow your retirement wealth.

 

Here’s an example of the kind of difference just a small amount could make:

 

Kim and Robyn were colleagues. From age 40, they both earned a salary of $80,000 a year.

 

Kim, who didn't salary sacrifice, ended up with a super balance of around $341,235 when she retired at age 65.

 

Robyn decided to salary sacrifice 2.5% of her income each year, which meant she had around $25 per week less take home pay, but when she retired, her super balance was $397,859. That’s $56,624 more than Kim.

 

There’s no minimum amount required for salary sacrificing although there is a maximum you can contribute each year before you incur tax penalties. This is called the concessional contributions cap.

 

The cap is a limit on the amount of concessional contributions you can add to your super each financial year, without incurring tax penalties. The combined total of your 'concessional contributions', which includes your salary sacrifice contributions, employer’s compulsory super guarantee contributions and any personal contributions where a tax deduction has been claimed, can't exceed $27,500 per year. [this amount will increase to $27,500 on the 1st July 2021].Check the ATO website to find out more about the different types of concessional contributions.

 

This strategy is potentially a great way for you to boost your super, but it

is important to remember that super is a long term investment and you will not be able to access it until you retire or meet a condition of release. There are also conditions and eligibility criteria that may apply so it is worth visiting the ATO website for further information about this.

 

If you are considering making an additional contribution to your super, we suggest speaking with a financial adviser who can review your personal situation and work out what is the best and most tax effective option

for you. A financial adviser can also help make sure your super is invested to suit your life stage and risk preference to get you on track to achieve the retirement you want.

How much will I need for retirement?

How much is enough to enjoy a comfortable retirement? It’s never too early or too late to start thinking about your super and what you may need to live your best life in retirement. This video discusses the types of things you need to consider when planning for the future.

Whether retirement is just around the corner or decades down the track, it’s never too early (or too late) to start thinking about it.

 

One of the most common questions that Australians want to know is: “How much money will I need for retirement?”

 

Everyone’s retirement needs are different, so in this video we’re going to discuss the type of things you need to consider when planning for your retirement– and how much you may need.

 

To get an idea of what you’ll need, think about your goals and aspirations today:

 

For example, you might want to travel, study, start a family, buy a home or renovate your current home.

 

Now think about where you'd like to be a few years before you retire. For example, you may want to have paid off your mortgage, reduced your working hours, or sold your home to buy a smaller place if your children have moved out.

 

Finally, think about what kind of retirement you'd like. The

type of lifestyle you want to have once you've finished work will largely

dictate how much you need to save.

 

As a guide, if you own your own home, it’s estimated you’ll need two-thirds of your current annual income to maintain your existing lifestyle.

 

For example, if you earn $90,000 a year now you may need around $60,000 each year in retirement.

 

If you rent your home, you will need to factor in this additional cost. This could mean you will need more than two-thirds of your current annual income.

 

Let’s drill down a bit further to look at some current estimates of what your retirement lifestyle may cost.

 

The Association of Superannuation Funds of Australia (or ASFA) regularly benchmarks the kind of budget that Australians may need to fund their lifestyle during retirement. They split it into two categories: modest and comfortable. Both budgets assume that you own your own home outright and are relatively healthy.

 

A modest lifestyle covers fairly basic and inexpensive activities. For example, taking one holiday a year within Australia, eating out occasionally at cheap restaurants, and doing limited, inexpensive leisure activities – such as the odd trip to the movies.

 

A comfortable lifestyle means you should be able to go on frequent holidays, both within Australia and overseas, you can enjoy eating out at nice restaurants and not have to worry about utility costs, and you can take part in lots of leisure activities.

 

Which lifestyle are you aiming for? There’s no right or wrong answer – but considering this will help you determine how much you will need for your retirement.

 

To give you a general idea, here is how much these lifestyles may cost.

 

In the left column, you will see what amounts ASFA predicts is required per year for a modest lifestyle for a single person and a couple, and on the right, for a comfortable lifestyle.

 

 Another important factor to consider is how long your retirement money will need to last. This is based around your life expectancy.

 

For example, a 65-year-old man could expect to live to about 85, while a 65-year-old woman around age 87. And that’s just the average – many people live well beyond those ages.

 

As this graph shows, the life expectancy for Australians is constantly increasing which is great news, but it also means your retirement savings needs to last longer.

 

So you should plan for your income stream to cover you for at least 20 years after you've retired.

 

Now, let’s take a look at the types of income you can receive when you’re retired. There are three main sources:

 

•            Your own assets and savings

 

•            The Age Pension – if you’re eligible, you may receive a full or part payment from the government

 

•            The money you've invested in your super account

 

Your assets and savings includes things like shares or maybe an investment property, as well as any money you might have in the bank or term deposits. Dividends and capital gains from shares, rent from an investment property, or interest from savings may all contribute to your retirement income.

 

The next type of income you could receive in retirement is the age pension. You may be eligible for a part or full payment, and that can go towards your living costs. But if that’s your only source of income, your lifestyle will be much more restrictive than either the modest or comfortable lifestyles we've just looked at.

 

Your eligibility depends on how much income you receive from other sources such as investments and super, and how many assets you own. For example, if you have investments outside of your super, or you own property other than the home you’re living in, it’s unlikely that you’ll get the full payment – and you may not be eligible to receive any payments at all.

 

This table shows the maximum amount of Age Pension that singles or a couple could receive each year as at 20 March 2020.

 

And of course your superannuation is the other main source of retirement income.

 

Now, combine the total of any investments and super that you currently have to work out if you are on track for the retirement lifestyle you want. You can use our super calculators to project how much super you will have at your retirement age and also to find out how much income per year this could be expected to provide.

 

If these figures seem out of reach for you, don't panic. There are ways to boost your super so you can get on track to reach your retirement goals.

 

A good place to start is by watching our 'Boost your super' video. We explain different types of super contributions and tax-effective

strategies that you may be able to use to get your super into a better

position.

 

Seeking financial advice is also an important strategy that can help in achieving your retirement goals. A financial adviser will consider a range of options that can boost your super now, as well as provide advice on

the best ways to manage your money when you retire.

 

And remember, we’re always here to help you with any questions you have about your super.

 

Thanks for watching.

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Disclaimer

Avanteos Investments Limited ABN 20 096 259 979, AFSL 245531 (AIL) is the trustee of the Colonial First State FirstChoice Superannuation Trust ABN 26 458 298 557 and issuer of FirstChoice range of super and pension products. Colonial First State Investments Limited ABN 98 002 348 352, AFSL 232468 (CFSIL) is the responsible entity and issuer of products made available under FirstChoice Investments and FirstChoice Wholesale Investments.

 

Information on this webpage is provided by AIL and CFSIL. It may include general advice but does not consider your individual objectives, financial situation, needs or tax circumstances. You can find the target market determinations (TMD) for our financial products at  https://www.cfs.com.au/tmd which include a description of who a financial product might suit. You should read the relevant Product Disclosure Statement (PDS) and Financial Services Guide (FSG) carefully, assess whether the information is appropriate for you, and consider talking to a financial adviser before making an investment decision. You can get the PDS and FSG at www.cfs.com.au or by calling us on 13 13 36.