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Four Superannuation Basics For Self-employed Folks
Written by Peter Stanhope
on January 05, 2018

‘Motivation is what gets you started.  Habit is what keeps you going.’

-Jim Rohn


Ah, the New Year.

You’ve had a much-needed break over Christmas and New Year, and you’re determined to get 2018 off to a good start.

Maybe you’ve spent the holidays working on your business strategy, and even written a colour-coded future log in that hand-crafted bullet journal your bestie gave you for Christmas.

You aren’t short on motivation. To be self-employed you have tonnes of motivation. It’s almost impossible to be self-employed (and survive) if you don’t.

Maybe superannuation is on your list. If it isn’t, grab a pen and write it in. Put a dot beside it.

Because unlike your cousin who works in the public service, if you don’t get it sorted, no-one will. Fully 75% of self-employed are not contributing to super right now, and fully one quarter of them have no superannuation at all.

It is easy to shove super into the ‘I’ll sort it later’ basket when you are focused on building your business. It is confusing, boring, and you know...forms to fill out.

But super is, well, super important. Not just to make sure you have a decent retirement, but to minimise the amount of tax you are paying right now. And who wants to give the ATO more than their fair share?

So at the moment, that means you need to put aside some time to get the systems and processes in place to get it sorted.

When GigSuper launches this year, you’ll be able to get your super into super shape in just five minutes on your phone.

We’ll even track down your existing super accounts and roll them all into one easy to manage account. You will have total control over how much, and when, you contribute, and our non-super account linked seamlessly to your super will get you through those fluctuations in income that can be a part of being self-employed.

In the meantime, here are some ways to get your super back on track (you might want to take notes).

*Please note that the steps below convey factual information, and are not intended to imply any recommendations or opinions about financial products or classes of financial products.

Step 1 - Choose a superannuation account

Chances are you already have superannuation sitting in an account from previous employers. But while it may have been the best account for them, is it the best one for you now you are self-employed? Most superannuation is set up for the traditional employer/employee relationship, and your present fund may not be the best choice now you are out on your own.

Step 2 - Set up a seperate savings account

Set up a seperate non-super account that you can make deposits into during the year.  Not having your savings mingled with your spendings makes sticking to the good habit of saving so much easier.

Step 3 - Calculate your saving amount

Calculate how much you need to save each month to achieve your desired retirement balance. There are a number of great free calculators out there on the net to help with this including those on the Money Smart website

Step 4 - Set up a direct debit

Set up a direct debit so that money is automatically put aside each month which makes creating and sticking to your good habit that much easier.

Step 5 - Transfer to super

Once you’re comfortable you can lock the money away until retirement, send it to your super fund.  Different funds have different ways of managing this so you’ll need to contact your existing fund to work out how to do it.  

Step 6 - Claim a tax deduction

You may be able to claim your voluntary contribution to super as a tax deduction.  If you’re unsure it’s best to contact your financial advisor and seek advice.  With most super funds you can generally do this by completing a Notice of intention to deduct form, however its best to contact your super fund to determine the best way to do this.

Simple, right?

Or you can come and register at gigsuper.com.au right now, and let us help you tick super off your to-do list in 2018.

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Join our community to discover how GigSuper can help you get your super on track.


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Example disclaimer

Alex is a fictional persona based on some typical attributes of a self-employed individual. Please make sure that GigSuper is right for your circumstances, even if your situation is identical or similar to Alex.

Figures are shown in today’s dollars, however they are not intended to be reflective of any particular investment option within GigSuper. These results are for illustrative purposes only and do not represent actual or expected returns that any particular investor might experience.

The projections are based on a number of assumptions, including but not limited to the following:

  • For both the super and non-super investment products an annual return of:
    • 2.37% capital gain
    • 4.88% income
    • 0.56% franking.
  • Tax rates on income and capital gains both inside and outside super remaining constant which may not occur.
  • A steady inflation rate of 2.5% which may not occur.

The prospective financial information provided is not a reliable indicator of future performance in that it is predictive in nature and may be affected by inaccurate assumptions, unknown risks and other uncertainties. Therefore, the prospective financial information may differ materially from the results ultimately achieved.

The above comparison in no way constitutes advice to invest in any particular investment product and we recommend you seek independent financial advice before deciding whether investing in super or non-super products is right for you.