ASIC
(MoneySmart)

Got enough super?

• Use the retirement planner
• How much super will you need?
• Boost your super savings
• Protecting your super changes
• Get financial advice

Use the retirement planner

The retirement planner shows you:

• your estimated super at retirement
• your yearly retirement income
• how fees, investment options and contributions affect your retirement income.

The retirement planner will help you test out different scenarios and work out how to grow and add to your super.

How much super will you need?

How much super you need will depend on:

• the lifestyle you want in retirement - According to the Association of Superannuation Funds of Australia (ASFA) a comfortable lifestyle for a couple costs about $60,000 a year and a modest lifestyle costs about $40,000 a year.
• how long you're likely to live - People are generally living longer than previous generations. Retirees can expect to live well into their eighties and this means if you stop working at 65, you're likely to need retirement income for at least 20 years or more. Visit the My Longevity website to explore your life expectancy.
• your big costs in retirement - Are you planning any major spending after retiring? For example, you do you want to pay off your mortgage, renovate your home, or travel? The more money you spend early in retirement, the less you'll have to live on later.

Boost your super savings

If you want to boost your retirement income you can:

• consolidate your super into one account
• increase your super contributions
• put your money into a less conservative investment option (but get financial advice before you do this)
• work part-time before retiring
• think about a more modest lifestyle in retirement.

Protecting your super changes

From 1 July 2019, new arrangements to protect your super balance from erosion by inappropriate insurance and fees will apply:

• cancellation of insurance: super funds will cancel insurance on accounts that haven't received contributions for at least 16 months. Your fund will contact you if your insurance is about to end. If you want to keep the insurance through your super, you must tell your super fund or make a contribution to that account. You may want to keep your insurance if you don't have any through another fund or insurer and you have a particular need for it (e.g. you have children or other dependants or work in a high-risk job).
• no exit fees: there are no exit fees if you leave your super fund.
• fee limit on low-balance accounts: annual administration and investment fees can't exceed 3% of the balance of accounts with less than $6,000. Your account balance is calculated at the end of the fund year.
• inactive account transfers to ATO: accounts with less than $6,000 that are inactive for 16 months will be transferred to the ATO. The ATO will merge it with your other active super account. If you don't have another active account, the ATO will keep your super safe.

Get financial advice

Planning for your retirement is complex and it's important to get advice from people with specialist knowledge. See financial advice for more information on how you can maximise your retirement savings.

It's never too early to start thinking about your super. Take steps now to get the retirement lifestyle you want.

Rebecca Gredley
(Australian Associated Press)

Australia's tax agency says it can retrospectively deliver tax cuts if the coalition's proposal doesn't pass through parliament before the end of the financial year.

But it remains to be seen if the tax cuts will pass parliament, with key crossbench senators still to pledge their support for the plan.

Government senator Zed Seselja is urging Labor to support the changes in order to give them a seamless course through parliament, avoiding the need for the crossbench votes.

Shadow treasurer Chris Bowen says Prime Minister Scott Morrison is already breaking election promises, after pledging Australians tax relief this financial year.

"If the Australian people have to wait another year for the tax cuts, I think it's an indictment on his government and the character of the prime minister," he told reporters in Sydney on Tuesday.

Greens leader Richard Di Natale says the minor party won't support the income tax cuts.

The party held onto all of its six Senate seats up for re-election, taking the Green's total to nine.

"We had millions of Australians voting for parties like the Greens in the Senate to hold this government to account, and we'll do that," he told ABC radio.

"We're not going to support tax cuts to people on half a million dollars if any support is going to be given it needs to be targeted at people on low incomes."

The Australian Tax Office says it can retrospectively amend tax assessments to provide cuts if the laws pass after June.

The agency could also make administrative changes to provide tax cuts.

"If the Labor party agrees to support the coalition tax cuts as announced, then we would be able to update the tax withholding schedules, to allow the tax cuts to be reflected in people's take home pay," the ATO says on its website.

Treasurer Josh Frydenberg will meet with Treasury officials and the Australian Securities and Investments Commission in Canberra on Tuesday, before heading to Sydney to catch up with Mr Morrison.

He's expected to meet with Reserve Bank of Australia Governor Philip Lowe and the Australian Prudential Regulation Authority on Wednesday.

The meetings come as Dr Lowe prepares to deliver a major speech on the outlook for the Australian economy and interest rates in Brisbane on Tuesday.

Money and Life
(Financial Planning Association of Australia)

Time for your next pay rise?

It's important to get paid what you're worth, for your self-esteem and your bank balance too. Find out what's going on with wages and jobs in Australia and whether you should ask for a raise.

Be in it to win it

In spite of all these new jobs promised and delivered, sluggish wage growth seems to be sticking around and could certainly make it pretty tough to convince your boss you've got a strong case for a pay rise. On the other hand, if you don't ask you don't get as a March 2018 report by comparison site Finder shows. In their survey of 2085 people, 3 in 5 who asked for a pay rise got one, receiving an average increase of 5.43%. That's well over double the current WPI figure of 2.1%.

However, the survey also shows alarming results for how successful men are compared with women in the salary increase stakes. Men achieved a higher average increase of $3919 compared with women ($3697). This goes some way to helping us understand why the gender pay gap in Australia is as high as it is, with men earning 15.3% more on average for doing the same jobs as women. As well as being less successful in their negotiations, part of the reason could also be because women aren't as likely to come forward and ask. According to the same survey, almost twice as many men as women asked for a pay rise 32.2% compared with 18.5%.

All fair and above board

Knowing what others are paid can be important when it comes to deciding how much to ask for yourself. When salaries are cloaked in secrecy you can feel like you're selling yourself short if you ask for a modest raise or being greedy when you expect a lot more.

A number of countries are certainly putting pay transparency high on their policy agenda, in a bid to eliminate the gender pay gap. In the UK, mandatory gender pay gap reportingwas introduced in April 2017. The new measure requires all UK organisations with 250 or more employees to publish gender pay gap figures by April 2018 and take action to close any reported gap. Iceland have taken it a step further by making it illegal to pay women less than men. From 1 January 2018, all companies in Iceland with more than 25 employees will need a government certificate to prove pay equality for their remuneration or face fines. This bold move should come as no surprise from a country that has been ranked best in the world for gender equality by the World Economic Forum for nine consecutive years.

Should I be asking for more?

Regardless of whether you're a man or a woman, if you have a sneaky feeling you should be asking for a raise, here are 5 excellent reasons to have a conversation with your boss or HR manager about your salary:

1. Your job description hasn't been checked against comparable roles in other organisations for years. Benchmarking rewards within your sector is a reasonable way to settle on a fair rate of remuneration.
2. You always reach assigned goals or often exceed them and go the extra mile to help your team.
3. You have no timeframe or progress measure for when you can expect your next pay rise and no knowledge of what the amount of your pay rise is linked to.
4. You see your company spending money on other things but keeping salaries much the same.
5. You've raised the issue of a raise in the past and your boss knocked you back, saying 'you're lucky to have a job at all.'

Make sure you take a look at some tips for negotiating for a pay increase to help you prepare. And if tackling the issue of pay in a clear and reasonable way doesn't get you anywhere, have a good long think about whether you're really valued by your employer and what the future might hold if you stay in your current role.

Thinking about asking for a pay rise soon? Get tips for negotiating for a pay increase and give some thought to the real cost of shifting the work/life balance before you decide to take on more responsibility.

ASIC's MoneySmart
moneysmart.gov.au

Superannuation basics

If you're hoping for a comfortable life in retirement, spend some time learning about your superannuation (super). Taking a few steps now could significantly boost your super and make a big difference to your future lifestyle.

• What is super?
• How to choose a super fund
• How do I make super contributions?
• What happens to my super money?
• When can I access my super?

What is super?

Your employer will make contributions to your super fund and you can top it up with your own money. The government may also make contributions if you are a low income earner.

How to choose a super fund

Most people can choose which super fund they'd like their super contributions paid into. Check with your employer to make sure you can choose the fund your super is paid into. Super comparison websites can help you compare super funds. See choosing a super fund.

When you can choose your super fund, tell your employer by filling in a standard choice form from the Australian Taxation Office (ATO) or from your employer. If you don't (or can't) choose your own super fund, your employer will put the money into a 'default' super fund, known as a MySuper account. See types of super funds.

Insurance through super

MySuper funds have a default level of death, disability and income protection insurance that you will automatically be covered for. If you don't want this insurance you will need to tell your super fund you want to cancel it.

Insurance through super can be cheaper than similar cover outside of super and you can usually request to increase it if the default cover is not enough to suit your needs. See insurance through super for more information.

How do I make super contributions?

There are typically three types of super contributions: employer contributions, personal contributions and government contributions.

Employer super contributions

For most people, your employer must pay an amount equal to 9.5% of your salary into your super fund account. This is on top of your salary or wages. Over the course of your working life, these contributions from your employer add up, or 'accumulate', which is why they are known as accumulation funds. Your super money is invested by your super fund so you will earn investment returns on the money.

Employer contributions are based on your 'ordinary time earnings'. For example, if your ordinary time earnings are $50,000 then you should be paid an additional $4,750 into super. Ordinary time earnings are what you earn for ordinary hours of work including over-award payments, bonuses, commissions, allowances and certain paid leave. See the ATO's information on using ordinary time earnings to calculate the super guarantee.

Work out how much your employer should be paying into your super fund.

employer contributions calculator

Super contributions if you're self-employed

If you are self-employed you are responsible for making your own super contributions, but they are tax deductible. See super for self-employed people for more information.

Personal super contributions

You can make extra contributions by:

• Salary sacrificing - Your employer can direct some of your pre-tax income into super. This will be deducted by your employer and sent to the fund with your employer contributions.
• Personal contributions from your pay - You can ask your employer to make personal contributions from money you have paid tax on. Lower income earners who do this may be entitled to government co-contributions. See super contributions.
• Bank transfer - You can transfer some of your savings into your super account using BPay or direct deposit. Ask your super fund for details.
• Super transfer - Transferring all or some of your super from another fund into your main super account.

Bonus contributions from the government

If you earn up to $37,000 you may also get a 'low income super tax offset' of up to $500 from the government. You don't need to add extra money to your super to be eligible for this payment. Both of these payments will be paid into your super automatically after you have lodged your tax return.

What happens to my super money?

Your investment returns will impact how quickly your super grows so it's important to choose an investment option that is appropriate for your investment timeframe and tolerance for market fluctuations. See super investment options for more information.

When you retire your super can be taken as a lump sum, a regular income stream, or a combination of both. If you choose to take your super as a retirement income stream, the money that you're not accessing continues to work for you and earn interest. See income from super for more information.

When can I access my super?

If you retire and have reached your preservation age, you can withdraw your super. The table below shows when you can access your super, according to when you were born. Here are more details on how to get access to your super.

Understanding how super works can help you make the most of it, whether you are just starting out, are close to retirement or have already retired. Learn the basics and you can become your own super hero.

Related links

• Superannuation calculators - Crunch the numbers on your super
• Is your super on target?
• Keeping track and lost super
• Super scams

Money and Life
(Financial Planning Association of Australia)

A survey of 1100 high school students suggests many are confused about how credit cards work. Are new technologies making it harder for young people to understand what money management is all about? And what can we do about it?

Understanding what happens when you spend money on your credit card seems to be something of a blind spot for young people living in the 21stcentury. When asked how long it would take to pay off a $2,000 credit card debt, making minimum repayments only, more than half of 1100 high school students surveyed believed the debt would be settled within 3 years. Assuming an interest rate of 18%, it would actually take more than 15 years to clear the balance[1].

In today's world where tap-and-go technology and online shopping are the norm, the choice of ways to spend our money keep growing. So just how serious an issue is financial literacy for our kids and teens? We spoke to Kendall Flutey, co-founder of Banqer financial education software to get her take on the importance of financial education and what we can all be doing to help kids understand their responsibilities around money.

What are some of the new challenges young people are facing when it comes to taking control of their finances?

The way we're managing our finances in the 21st century is evolving, and fast. At the heart of these changes is the increasing intangibility of money as we move towards a cashless society. Although this is a really exciting innovation that can make it easier to keep track of money, it causes some issues for our youth. Spending digital currency just doesn't have the same psychological trigger that handing over a ten dollar note does it's a softer loss. It's that much harder to put the value of what you're buying in context a bottle of Moet seems equivalent to a bottle of milk when it's just the tap of a card away. So when young people are out in the world spending their money, we often see a big disconnect between actions and their financial consequences.

What signs are we seeing that young Aussies lack awareness of key financial concepts?

The issues we're seeing with financial literacy aren't new, but they're more widespread. From the early interactions we're having with 5,000 Aussie kids using our platform we're certainly seeing kids who don't comprehend the responsibilities that come with servicing debt. And we're seeing many children in our learning environment struggling to maintain positive cash flow. This kind of activity in kids (and adults too!) often comes with other negative financial behaviours, such as a lack of regular savings and/or a disregard for the future.

Thankfully, at a young age these behaviours can be changed more easily! By making kids aware of the consequences of their assumptions and actions, we can help them become more financial literate and responsible.

What do you think are some of things causing this lack of awareness? What can be done to change it?

It's important to remember that no real ownership is granted over the life skills that support good money management. Australia hasn't mandated these lessons in schools, so the burden mostly falls on parents. I think it's true to say that the majority of us earn our financial stripes by seeing what our parents do, and through our own trial and error.

For a busy parent, making time to talk about money may be something that's less important than other types of guidance and education. And for others, their own lack of financial capability can be detrimental as it gets passed along to the next generation. Financial illiteracy is shown to be a cyclical problem, entrenching inequality and often leading kids to adopt negative financial behaviours from a young age. Parents in this situation may not intend to model poor money management but when you're having a hard time keeping financially afloat yourself, teaching your kids to do the opposite is an unlikely outcome!

In order to change this and ensure equal access to a standard level of financial literacy for every child in Australia, we need to find a new way to deliver a robust financial education, at least from an academic perspective. I believe the place for financial lessons to be learnt is in our schools. Parents still play a valuable role but just as with other educational subjects, school makes the most sense as the place to be taught this important life skill.

What are the real world risks for young people with limited exposure to the basics of personal finance?

Personal finances are often a balancing act. Education plays a crucial role in getting the balance right between income and expenses in order to achieve a surplus. In the last decade or so we're seeing a powerful force tipping the scales: hyper-consumerism. This has a profound impact on our kids and teens who are being targeted by increasingly sophisticated marketing tools and techniques, to the point where it's hard to tell the difference between online advertising and an authentic content post.

At the same time, we've seen financial education standards falling amongst our youth, which only makes things worse. This corresponds to a higher risk of our next generation living with debt, permanently. If you're determined to keep buying and don't have the financial savvy to understand the consequences of these decisions it can shape your entire financial future.

What can parents and schools do to support kids towards a more responsible approach to managing their money?

I believe parents and schools both have a role to play here. Parents are better positioned to speak candidly about past and present monetary experiences, oversee engagement with real financial products and services, and foster a safe environment for kids to experience their 'financial firsts'. Schools, on the other hand, can really reinforce the fact that financially focused conversations are an acceptable and normal part of life and education.

School should also act as the sandbox environment, a place where kids can make monetary mistakes, understand the consequences and learn from their experience. Regardless of the tool, resource, or online platform they choose for these activities, I feel all schools should incorporate practice of these vital life skills into their curriculum.

The FPA and Banqer are working in partnership to boost financial literacy in our schools. Looking for ways to help kids learn some positive financial habits? Find out more about money lessons new and old for your children.

[1] ABC News, Cashless kids: Is tap-and-go technology promoting financial illiteracy? Kathy McLeish, 17 August 2017. http://www.abc.net.au/news/2017-08-17/cashless-kids-what-is-tap-and-go-doing-to-the-younger-generation/8812168