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. In the future, and let me add a soft plug warning, you’ll be able to do this via gigSuper – a super fund we are currently building specifically for the self-employed to streamline these processes.
*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 separate savings account
Set up a separate 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.