First 2008 Goal Achieved – Check!

I took the plunge and increased my pre-tax superannuation (retirement for the non-Aussies) contributions to 3% today, checking off one of my 2008 financial goals.

This means I now have a total of 11% of my salary going into superannuation, once the governments 9% superannuation guarantee amount is factored in as well.

This may seem a controversial decision for some, as I’m still carrying such a high debt load, but I’m single, almost 39, and rent. I need to start looking out for my future today, to maximise any compound interest benefits I can while they can still make a difference. Even waiting 2-3 more years will make a big difference at this point in my life, so I’m going for it.

As the money is coming out pre-tax, it doesn't have a have a huge impact on my life today, however every bit will help at the retirement end of things. I wasn't aware we had a ceiling on the pre-tax contributions you can make to your super, but as of July 2008 it’s $50,000 (indexed) into your super account each year, to take advantage of the lower tax rate on retirement savings. Anything over that is taxed at 31%.

I guess that’s why I had no idea; I’m not even close to contributing that amount, even at the higher 3%!

In reading around the blogosphere about retirement options, plonkee's post on planning for retirement really struck a chord with me. It was short, sharp and to the point, and definitely worth a read. I’m glad to know I’m following those three steps myself.

It also seems louise at My Journey To Eliminate Debt is also looking to boost her retirement savings, and Matt at Frugalize just used his annual pay rise to boost his; a really smart idea if you’re living comfortably at your current income.

Do you actively contribute to your retirement funds pre or post tax? Or at all?

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Dude, Where’s My Superannuation?

I made the mistake of checking my Superannuation fund yesterday while I was thinking money.

Could I have picked a worse day to check it than the day $100 billion was wiped off the Australian Stock Exchange?

It made a big dent in my super balance, a touch over 11% gone as I've invested my fund almost entirely in Australian Equities. Oh well.

I’m not touching anything for now, I've still got 26 years until I retire (assuming retirement is at 65 for me) so I’ll just sit tight for now and ride out the storm. Plus start learning more about how best to manage my retirement funds and diversify once I have a clue what I'm doing.

I was speaking to a friend in London last night about all this and he was telling me he’s got over 4 times as much as I do and he’s only a year older (he's just moved there). Granted he earns substantially more than me and has done for years, but the key difference is he’s been contributing at least 11% since the superannuation guarantee kicked in 1992. A smart cookie that one.

I won’t be selling the shares I found yesterday any time soon either. If I was in a better position financially I’d actually be buying more to be honest! :-)

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Superannuation Hunt Update

I've had great success with tracking down my superannuation accounts from old jobs so far. The account from my years in hospitality (harks back to the inception of the Superannuation Guarantee), has been located and I’m awaiting the amount and details for transferring it.

Payroll at work have advised 2 more days in regards to the super from my first 8 and a half years at my current company (I was retrenched, and then went back a year later). I had a different employee number so it’s a separate account that I’d lost track of.

I've also found the $1897 from my ‘year in the wilderness’ when I worked in an insurance call centre for six months as I had been unemployed for six months and was going mad. I actually made pretty good money there really, plenty of weekend shift penalties to be had plus commissions.

It’s quite nostalgic talking a walk through your career path, to see how far you've come and how you got there.

I’ll really be able to assess how I’m tracking for retirement once it’s all in one spot, which I’m really looking forward to (who knew super was so exciting!).

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November Challenges

Well I’m 2 months into my ‘debt diet’ and not unlike a weight loss diet I've come up against challenges that threatened to derail my efforts. That said, it’s simply a matter of picking myself up, dusting myself off and keep moving forward one dollar at a time.

Now that my monthly pay doesn't kick in until December, there’s 3 pay periods this month; which should really assist in getting that debt snowball rolling again and gathering some momentum before the end of the year. Not to mention the pay rise kicks in from now too!
I’m two weeks ahead in the rent from last month, so will use my first November pay to really get a good head start on that snowball.

I’m also kicking off my new simplified budget, which I’m excited about using in real life.
Last months unplanned expenses really showed me the need for at the very least a starter emergency fund of $1000, so I’m looking to get that underway too.

I've got two weekends away, a work trip, and my companies Christmas party this month too, which should all throw some challenges (or at least opportunities to make some good decisions) my way.

November in a nutshell:

• Maximise debt snowball payments this month
• Live to new budget
• Stash $300 into starter emergency fund
• Send off 'find my super' paperwork and consolidate all my superannuation into one account

Ugly truth post to come…

New Job New Opportunities

I started my new job yesterday!

Everything went well on my first day, the usual getting my desk set up and spending time with the new team I'll be working with. I'm really looking forward to getting stuck into the new work and learning new skills. Aussie readers may even see the results of my work in new offers from a certain company over the coming months!

I also received an email from the payroll department. I'm not switching to monthly pay until December, so that means 3 fortnightly pay periods in November - hurrah! This should help the debt payments along quite well.

As I'd thought I was going to switch to monthly pay in November, I'd pre-paid an extra two weeks rent and stashed $400 for expenses in that transition period. I can now use all of that extra money, plus the two weeks worth of rent money to throw at my debt next pay, which will be very nice after all the outgoings due to the inspection in October.

Shame it's not until the 2nd of November as October's numbers are going to be very ordinary...

The increased salary means I can also make a real start on my starter emergency fund. My goal is to have that $1000 stashed away by the end of February 2008.

I've also started contributing 1% of my pre-tax salary to my superannuation, bringing it to a total of 10% of my pretax salary when combined with the government 9%. I'm not going to feel that 1% as it's starting with the first of my increased salary payments, so looking forward to playing an active part (if only in a tiny way)in my retirement funding for the first time.

Well Hello Super Fund!

I received my annual superannuation (retirement fund) statement tonight for the last financial year. I almost fell over when I opened it (for a change, I never seemed to bother with them before).

My Super is now sitting at $124,057.77!

I need to check tomorrow if that's both my funds from working at this company combined or just this last 5 years, but regardless I can't believe how much I've accrued!

Even more exciting is my employer contributions were $6130.80 for the period, and I contributed a whopping $797.74, but the total increase for the year was $31664.44, so a return of $24735.90 or 26.7% on last year.

This is HUGE for me. It's the difference between retiring at 60 instead of 65, and if I start adding personal contributions (my long term goal is to match the 9% company contributions) I'll be set. I've decided to start with adding just 1% (for an even 10% total contribution) when I move to my new role next month, and then gradually build from there.

Yay for compound interest!

Sorting Out Superannuation

Another financial area I’ve completely ignored over the years is my superannuation. I’ve been lucky enough to have worked under the superannuation guarantee, so I’ve been getting 9% of my salary over the years put into superannuation by my various employers.

Do you think I know where any of those funds are or how much is in them? Of course I don’t. I’ve had 5 different employers over the years, so at least I remember that much.

That’s all going to change this week.

I’m going on a Super hunt, and whatever I find will then all be rolled over into a single fund of my choosing, rather than leave it to the company to decide what’s best for me, and to also minimise fees.

The Australian Tax Office even has an online search tool, SuperSeeker to help me look.

Too easy, I can’t believe I hadn’t got around to doing this earlier.

Update: There wasn't anything on the website, but I've downloaded the form for the full search to locate all my super. Once I've located vereything I can look to consolidating it in the fund of my choice.