EP03 Julie Slapp - FINAL
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[00:00:00] Is it too late at 50 or 55 or 60 to start getting your superannuation on track? Oh, it's absolutely never too late. I, I actually think that, you know, just that little bit extra is always good.
Welcome to a special six-part miniseries, What I Wish I Knew About Small Business Before I Started. It's brought to you by my Media Magnet Podcast, and I'm your host, Liz Nable. In this series, we're stepping back from just media and PR to talk about the real lessons of running a small business in Australia right now, the money, the systems, the learnings, the visibility, and the mindset shifts we usually learn the hard way.
These episodes are proudly sponsored by AMP Bank Go, backing Australia's small businesses with tools and support that actually make day-to-day business life easier. [00:01:00] Let's dive into today's episode.
Nearly half of all small business owners in Australia aren't contributing to their own super. If you just heard that and thought, "Yep, that's me," this episode is for you. But stay with me here. I am right there in the no idea about super boat with you. I'm doing this podcast episode as much for myself as a small business owner as I am for you because it's no secret that many small business owners find this topic terrifying.
I promise you, this is going to be the most interesting conversation you'll have about super in your lifetime because it's going to inform you at a really easy-to-digest level, but it's also a wake-up call, to me too, that as small business owners, we need to pull our heads out of the sand and start paying attention to this.
No matter how hard the small business landscape is right now, it's time to get informed and take action for our future selves, no matter how tiny those baby steps are. [00:02:00] My guest today is Julie Slapp. She's the Director of Growth and Customer Solutions at AMP Super, and she spent more than 20 years building super products for BT, Westpac, Flare, and now AMP.
But here's what's different about Julie. Her mom is in her early 70s and still uses a passbook account at St. George. Her nan lived on the age pension. Her uncle ran a newsagent. She talks about super through family, not spreadsheets, and she's honest about the fact that even she, an economist and someone who spent two decades inside the super system, finds the rules intricate and complicated to navigate.
In this conversation, Julie and I get into the things most small business owners are too scared to ask. Whether $20 a week as a contribution is even worth it. A government incentive that could add $500 to your super that almost nobody knows about. A superannuation analogy from The Blind Side, one of my all-time favorite movies, that will explain in an [00:03:00] instant what you've been confused about for years.
And what happens when you bank on selling your business to fund your retirement and get hit with hundreds of thousands of dollars in a tax bill you didn't see coming. If you've ever thought it's too late or, "I don't even know what my balance is," this is the episode where you start. Let's get into it with Julie Slapp from AMP Super Cheers.
Cheers. Welcome to the podcast, Julie. Mm. It's a pleasure to be here. I'm glad someone in this room is a superannuation expert, because it is not me. I mean, super- superannuation's quite complicated, so I don't think anyone really can say they're a super expert. So what I wanna say before we start, because I want people to listen to the end, and I know for a lot of small business owners, their, their eyes and ears will glaze over when they hear super.
No offense. No offense. No, that's okay. Because I want them to listen to the end. So this is gonna be a super practical episode where we're gonna get lots of tips and tricks, some real-world advice for small business owners, [00:04:00] because a lot of us are in the same boat. So if you don't mind starting by introducing yourself, I guess, and telling us a little bit more about what you do.
Yeah. So my name's Julie Slapp. I work for AMP Super, and I'm the director of growth and customer solutions, which is a fancy way of saying that I just talk to customers, and I try and figure out how to best serve them for, to help them prepare for their retirement. So how do they accumulate the best way so that they can actually feel confident going forward?
Mm. I think superannuation for... And I'm speaking, I think, generally speaking on behalf of small business owners, is a... It's not a dirty word, but it's a word that induces a lot of anxiety in us because for a lot of us it's not something we have traditionally paid a lot of attention to. Do you know what? I don't think that's just small business owners.
I think superannuation is anxiety inducing for a lot of Australians. I think that retirement is not something that we have been prepared from a financial literacy perspective about [00:05:00] exactly how we do it. So even if you've got money accumulating, you also don't know what you're meant to do at the end.
You don't know how to prepare psychologically for retirement. It's not just the financial part. So I don't think it's just small business owners that are, that think super is a dirty word. I think it's most Australians. Yeah. It's definitely something that's taken me a really long time, and I'm still obviously getting my head around superannuation.
Talk to me a little bit about your kind of history, like your family history I guess, around money and finance, and give us a little bit of context around how you came to be doing what you do now. Yeah. I, look, I have an economics degree, so I officially I think I can call myself an economist. So you're not very smart then
But it means that, you know, like, um, I'm surrounded by people that are mathematicians and actuaries, people that believe in the perfect solution from a monetary perspective. But all of my family and superannuation [00:06:00] experience tells me that not any one single person is on the perfect mathematical journey to retirement.
Every single person has aspects of what goes on in their life that influence into their retirement, whether they intend to or not. And so it's not about having a perfect solution. It's about having enough tools in your toolkit to actually think about where you're gonna go. And so my family is, I, my dad was the primary breadwinner in my family, and my mom has, she'd pay bills and banking.
That's something that she understands. She still has a passbook account with St. George. Wow. So she's only in her early 70s, so it's a surprise that she's still on a passbook account, but she loves it. And she wasn't prepared. She didn't have a big super balance. She didn't think about exactly what her retirement would look like because it was their retirement.
And so my dad was the primary one that built up superannuation for them. So always [00:07:00] conscious that an individual's experience is also part of their partner's experience and their family experience. So can we rewind just a little bit? Yep. Because I'd love to address this before we move into the nitty-gritty about superannuation.
I know there's a sentiment out there... Well, there's, I guess there's a couple of different types of people out there. Those who are obviously very financially savvy, and what's the word? Very frugal and, you know, well thought out with their money and those sorts of things who, you know, have diligently contributed to their super over many months and years.
And then there's a school of thought, which I've sort of thought a lot about in, at my age, which is nearly 50, as sort of as I'm, I'm in a sandwich generation with kids, a small business, and, and elderly parents to look after, that what's the point of superannuation? And this is a genuine question. When I wanna live now, like, I wanna travel with my kids now, I don't wanna go on a cruise when I'm 80, and I can't really move freely and enjoy all the things that I can [00:08:00] enjoy now.
Is that a, a genuine kind of- Thought, like, is that a, is that, has that got genuine meaning behind it, that kind of idea? Like, I wanna enjoy my life now. Why would I sacrifice now to, like, build up all this wealth for future me which may not end up evolving? Yeah, I think it's a real thing. Like, actually deciding exactly what you wanna contribute to a potential future.
So I often think of that for me as future Julie's problem. Mm. Yeah. Um, sometimes future Julie's problem is only tomorrow, but sometimes it's about 20 years from now. I, and the way I think about that is also, like, you know, 200 years ago, was there even really a concept of retirement? Mm. You basically worked and then you died.
And so we now have this privilege where there is this moment where people take a step back and they actually think about how their next phase is gonna be, and I wanna make sure that I've got [00:09:00] enough money for that phase. But that's a privilege too. That's not something that we used to have, and so I actually think that we're not predisposed to think about exactly...
We're not, we haven't been wired for 200 years- Mm ... to kinda go, "Hey, this is how I prepare for that." So this is only a very recent part of Australia's history to have this kind of superannuation, and not every country in the world even has that kind of thing. So- Mm ... we are preparing for something that not everyone around the world is preparing for.
Not everyone, I mean, our parents didn't have superannuation their entire working lives. Mm. So even at, you know, I'm getting close to 50, my parents didn't have superannuation when they first started. Mm. And so we're the first kind of generation that's had superannuation for a lot of our working lives, and how we embrace that is we're pioneers.
Yeah. And that's exciting as well. But- That's a really interesting way to look at it. Makes me feel better. [00:10:00] I don't think that there is something where you go, "This is exactly the right way." Yeah. I think that there's lots of little decisions that we can make along the way. And whether you can, you're gonna be fully prepared, no one's gonna ever be fully prepared.
Mm. You can only do what you can do. Yeah. And everyone makes a decision. Like, you can make a decision whether you go to the gym today or not. Which might be about your health for the future. Mm-hmm. Or you can go, "Do you know what? Today's a day where I'm gonna have barbecue shapes and cheese for dinner."
Mm-hmm. Yeah. Like, both of those are valid options. Yeah. But you make those decisions every day, and it's the same with super. Yeah. So that's all well and good, contributing regularly to your super and being a good citizen, a good Australian pioneer- ... of superannuation. But... And we'll talk about the way superannuation's been designed in a minute, but I know that the majority of people listening to this podcast are small business owners.
And they're like, "Thanks, Julie. That's all well and good for you- ... to tell us about super, but I'm struggling right now to make [00:11:00] ends meet or to pay my staff or to pay myself." So talk to me a little bit about what you know from your insights within the bank and within that department in the bank. Genuinely, I basically want you to tell me that we're all...
that we're not the only ones and that we're all in the same boat. I mean, I would say we are all in the same boat. My uncle, he owned a newsagent. Mm-hmm. So he was a, a small business owner as well. And, like- You know, it means that there's a different plan. You need to think about it in a, a different way. But like when you are struggling for how you're gonna make payroll for your employees, well, that becomes the priority and that will be the priority.
But then there are moments where you get to, you've got a good quarter or you're approaching tax end and you're like, "Okay, well this is, this has been a good year." Okay, well how do you use some of that to prepare? I actually think this is, this is really similar to anyone budgeting priorities and, and so small businesses have more complex [00:12:00] budgeting needs.
Mm-hmm. But it's kind of like, okay, well I have to prioritize these things. I have to prioritize, you know, keeping my business afloat. That's the priority right now. Mm-hmm. But when you've got that little bit extra, how do you start to put in place the, the small things or the bigger things at tax time that actually mean that you're starting to prepare a, a backup plan as well for retirement?
So can you give me a bit more in depth, I guess, example of what that looks like? Because a lot of small business owners, obviously we've had COVID, then we've had inflation, cost of living crisis, war in Iran. Like when ... I mean, the hits just keep on coming. So when do you, do you start to go, okay, each payroll, like I'm just gonna squirrel away 20 bucks?
Or h- how can you actually practically do that? Like I n- I know you're not an accountant, we'll talk about advice in a minute, but i- is there sort of a, a, a format or like a formula of how, how you do that or how you start to say, "Okay, here's my opportunity"? Okay. I would say each is individual [00:13:00] experience.
Yeah. So I don't think there is one size fits all for any small business owner. But what I would say is actually kind of thinking to yourself, "Okay, my entire year, how do I think I can do this?" So some business owners have like really consistent cashflow. Mm-hmm. And consistent cashflow might enable you to kind of go, "I'm gonna put away $20.
I'm gonna put away $100 a, uh, $100 a week." $100 a week from age 30 will approximately give you $500,000 in retirement, so that could be a great way to do it. But that is not gonna be everyone. But when you go arou- when you're getting up to tax time, so, you know, maybe it's just setting a reminder in May to go and talk to your accountant and prepare for what you could be looking like at 30 June.
So should you be making a concessional contribution? Now, a concessional contribution has a tax deduction associated with it, then you're only [00:14:00] gonna pay 15% tax. That can be a fantastic outcome for you, reducing your tax bill, increasing your retirement balance, and overall improving your, your outcome. Okay, let's talk about what you just said then.
What's a concessional contribution? I wanna make this as clear as possible to anyone listening who's like, "What is this? What are these words Julie speaks of?" Just describe some of the main things you spoke about in that, in that little paragraph there. Yeah. So a concessional contribution is essentially a deposit into your superannuation that you claim a tax deduction on.
So if you're an employ- employee situation, essentially your employer makes that contribution, and they get that tax deduction. Right. But in your circumstance as a small business owner, you put that in, and then you tell the super fund, "I want to claim a tax deduction on it." Right. And then that's taxed at 15% for you.
So if you're on a marginal tax rate of 30%, for example, then you've got a tax saving. Mm. Everyone wants a bit of a [00:15:00] tax saving. Everyone loves a tax saving. You are... You've got a limit, so there is a cap per year, so you need to be careful of that, but, like, it's quite large. Mm. It's just over $32,000. Mm-hmm. So, you know, you've got to be, you've got to be making quite a bit of a contribution- Mm
before you're going to hit that cap. So but that's something you can talk about with your accountant, and just make sure that you're not going to hit anything there. But it gives you the best overall outcome for you if you've got that money at tax time. Mm, mm. Tell me a bit about what you know, I guess, in terms of the research AMP Bank has done, and I'm reading this off my sheet here.
AMP research found nearly half of small business owners aren't contributing to their own super. Why do you think that is? I mean, obviously it's tough, right, at the moment. But what's your answer to that? Do you know what? Like this is recent research, but I don't think it's a behavior that has changed just because of that.[00:16:00]
So I don't think it's that with everything happening around the world that, that small business owners have changed their behavior. I actually think this is something that's really consistent- Mm ... over the last decade. I think that small business owners have a really hard job, and I think that trying to balance actually really running a business, doing everything it takes to succeed, and also preparing for retirement, are something that, you know, they kind of go, "Oh, well, that's something that I can put off for tomorrow."
Yeah. And so I don't think this is new research. I think it is something that is kind of a little bit endemic to small business owners. Like- Yeah ... and I really understand that challenge. I, you know, like putting off, kind of going, "Okay, well, no, this is the focus. I wanna build this business. I wanna make it amazing."
Yeah. "I want my employees to have, you know, a great experience. I, I, I just, I wanna help as many people as possible." That [00:17:00] is what small business owners do every day, and it doesn't mean... It means that sometimes they're not, like, focused on superannuation, and I really get that. Mm. I just want them to take a small moment Yeah
to kinda go, "Okay, let's do a little plan each year and start to put away some stuff-" Mm ... "for retirement." And is that a plan that they would do with their accountant? Look, I think that doing something with your accountant or a financial planner- Yeah ... is a really good way to get started. Mm-hmm. Like, if you're already meeting with an accountant to prepare for your tax return, then they can give you some solid tips about, you know, how much you might be able to put away for super.
Mm. And that's an early start. I think when you're approaching a b- closer to retirement, or you're thinking of selling your business, or how you structure for there's a small business CGT exemption, there's lots of things, then it's really worth getting professional financial advice. Mm-hmm. Because there are some real tricks and tricks that the [00:18:00] government's put in place to make sure that that you need to meet particular rules to be able to- Yeah
take full advantage of that and... And I think in my opinion, in my humble opinion, that's also where small business owners get caught out, because we're not aware of those rules, so we don't know how to take advantage of those. Whereas, you know, if you're in a bigger business, you might have an in-house accounting department and those sorts of things.
So it's sort of, it's sort of a double-edged sword for us because not only are we time poor and we haven't historically, you know, contributed what we should to super because of lots of reasons, we also aren't getting the right advice and not making the time or thinking it's worth the investment to pay a good accountant.
No, and that's, I mean, that's entirely... Like when you're a, a sole trader- But you're growing your business and you wanna move into a structure that, you know, you might bring other partners or anything in and, and potentially you put in place shares. Well, shares create a complication for- Mm ... some of those small business exemptions.
You have to know how to structure that. You [00:19:00] have to know how you're gonna manage that debt because actually, that becomes part of how you're, how you need to think about retirement. Mm. But you also need to have things like protection for... You need insurance. You need all of those things that- Mm ... are really complicated if I'm really honest with you.
They are. There is no... And, and each business is different. Yeah. Each business has this own little ecosystem of the people that it depends on, the people you need to work with, the insurance you might need, the debts you might have. Each of those means that you have a little bit more of a barrier than someone who is just an employee- Mm
just getting a little paycheck. Yeah. Look, let's talk about that because a lot of small business owners will sort of say, or I mean, I think it's generally true that the superannuation program was originally structured for employees. Absolutely. So what, what would you say to that? Like, it's obviously... I guess it's more simple if you're employed by a big business or something like [00:20:00] that, and you don't need to worry about all that individual advice, so to speak.
Is the superannuation system disadvantageous? Is that even a word, disadvantageous? Are we at a disadvantage 'cause we're small business owners 'cause superannuation's not designed for us? I don't think you're necessarily at a disadvantage. So I would say the answer is yes and no. It was absolutely designed for employees.
There are great incentives for small business owners, but I think that they're sometimes a little bit more complicated, which means that you need to have like Googled it or AI'd it. Mm. You need to have an idea of what your plan is because... And like, like running your business, it's all centered around you.
Mm. You have to be the person that's that knowledge area. Whereas when it comes to an employee, essentially your employer takes care of it for you, and you don't really need to do anything. Yeah. So, like, it's just another thing that's on you. But there are lots of incentives. So there's [00:21:00] lots of things that mean that small business owners do not need to be behind.
They don't need to necessarily have any outcome that is any less than anyone who's employed. In fact, I think that there is a lot of incentives that mean that they could move ahead, and that is, I think, the beauty of it. Mm. That if their business can be successful, then their superannuation can also be really well set up for them.
Mm. Mm. What would you say to small business owners who kinda say that their business is their retirement plan? What's your take on that? I, I am a more risk-averse person. You're an economist, so that's not surprising. So I would say, you know, having all your eggs in one basket is, is, is not a great plan. Mm.
But that said, like, I, I really understand that sentiment. You're investing so much in how you... in this. This is your, like, heart's [00:22:00] desire. I absolutely understand the sentiment. But I also think, and I don't know if you've ever seen the movie The Blind Side- Yes ... with Sandra Bullock? Love it. Love, love, love.
But there's a part in it where she talks about the left hand tackle or whoever he is. Oh, yes. And she says that, you know, the quarterback is the, the mortgage payment, and the left tackle is the, is the insurance. And I kind of go, "Well, superannuation is a bit of insurance." So it is the insurance of, one, you can actually have insurance in it.
Yeah. But it's also the protection in case there is anything that does not work out. Yeah. And I think that that is also good to have. Mm. Devil's advocate, I think there's a couple of stats which I'm gonna totally quote wrong, but I'm just gonna give you- ... the general idea here. A lot of listeners to the podcast I know have gone off and started their own business at middle age, you know, anywhere from, like, 40 to 60.
So this might be their first business, maybe it's a side hustle, maybe they're a solopreneur. [00:23:00] It's a small business, that's for sure. So, and perhaps they haven't always been great at contributing to their super, or maybe they've come from a job where they've, you know, technically retired and then started their own business on the side.
Is it too late at 50 or 55 or 60 to start getting your superannuation on track? Oh, it's absolutely never too late. I, you know, I actually think that, you know, just that little bit extra is always good. So, eh, you've gotta remember that superannuation's only one part of how people retire in Australia.
We've got the age pension as well. That is a very solid backup. But superannuation will provide you with that little bit extra, and you can actually then consider how you structure that so that when you get to retirement, you can have a lifetime income stream. You can have an allocated pension that's flexible and enables you to go on holidays when you need to.
It, it's not [00:24:00] necessarily every single dollar can contribute to it. Mm. And what I would really say is that for someone who's taking this journey late at life, one, so brave, and I'm like I'm a bit in awe every so often I, I, I think about doing it myself. I go, "Oh." I know. I'm like- On, on Mondays at 8:00 AM. But I think women are the fastest growing category in this, you know, first business at la- later stages in life.
So w- women are doing it, and we know that women have also increased. I think we're the highest risk category for homelessness at the same a- I mean, I'm not correlating those two figures, but we, we tend to be hitting both those benchmarks at the same time. Yeah. Look, I think women have, have traditionally been at a bit of a disadvantage, and, and I think that they actually face a lot of the same things that small business owners face.
Like, you know, when it's about, you know, focusing on putting food on the table for your kids, making sure that they can do soccer or whatever their heart's desire is, women are often the [00:25:00] people who end up funding that. Mm. And I kind of go, that's the same thing about, you know, how you focus on short term versus long term, and I would never, ever say that that decision is, is incorrect because I kind of go, "Well, that's what you had to do.
That is." So I think that you can always make some of that up, though, because actually, you know, we, any dollar that you invest can have the effect of compounding. Mm. So it's invested in a lot of... Most superannuation funds have, like, high growth, growth assets- They're not correlated to whatever your industry is generally.
Mm. So, you know, you know, you, you can be invested in something and take advantage of it getting 12% return. Mm. You know? And actually, that means it's growing at way more than it's sitting in your bank account. Yeah. And so I don't think there is, there is too late. I think there is, "I just need to start." Mm.
And then once you start, you can get a [00:26:00] real pattern of what that looks like, and you can monitor it. But then no matter what the plans, whatever happens at retirement, you can be, you can be super happy with it. Mm. I met a rec- a woman recently who is largely on the age pension and then has a small amount of superannuation that she uses each year to go to Queensland to visit her grandkids.
Cute. And she's super happy with that. I don't think, I, I don't think that there is one answer to what retirement looks like for you. I think that there are people who reach retirement and don't have a feel for how they're gonna spend that time. Mm. And then that means that no matter how much money they've got, they're not happy.
Mm. So y- it's, it's not just about the money. Mm. It's about how you prepare, how you feel fulfilled. And I think that some of these businesses people are starting in their 50s or 60s- Mm ... they're about fulfillment as well. Mm. They're not just about- I believe ... how they create income. They're about how they wanna live their lives.
Mm. So I [00:27:00] guess there's no point asking you what we need to retire, like is there a figure that we need to retire on? I don't think there is a figure. I know that, I know that many other people in Super will tell you there's a figure, and there is absolutely a perfect mathematical figure, I'm sure. Yeah. I think that there is, there is a, a level that, you know, you can feel comfortable with.
There's a l- a, there's the same figure that for someone else will never feel comfortable for them. Mm. Mm. And so it really depends on where you work for, but also how you approach retirement. You know, if you go into it and you're like, you know, you basically end your job, and then you don't have- Yeah ... an idea of how you're gonna spend your time, that can also be incredibly sad.
Mm. So I, I don't think there is one figure. Mm. Unfortunately for me. Well, I probably don't have another figure, actually. It'll make me feel like I've got a decades of catching up to do. So let's get practical with this. So for a business owner who's potentially contributed little or nothing to their super- What's the minimum viable [00:28:00] starting point, and is something like a, you know, a $20 contribution per week even worth it?
$20 per week is absolutely worth it. I, I firmly believe that just getting started. Mm-hmm. But I also think that when you combine that with particularly as you're leading up into 30 June, going, "Can I afford more?" Yeah. Is, is a critical question. To top it up before- To top it up ... the end of the tax year. Yeah.
Yeah. So, you know, like, I think that it's really nice to have that little pattern of, okay, well, I, I should be putting something in, like, like you're doing for your employees- Mm-hmm ... if you have those. But then going, "Okay, well, how do I get the most value?" is actually something which is a kind of a May to June conversation and going, "Okay, I could afford to do this this year."
Yeah. Or, "I've got this big, I've got this big order in, I'm gonna put aside a little bit of that." Mm-hmm. Mm-hmm. Making those kind of proactive decisions, really saying to yourself, "Okay, well, how do [00:29:00] I... I need to inject myself into how I make sure that I'm prepared"- Mm-hmm ... is really important. Mm-hmm. And so I don't think it's, I don't think it's one bit of money.
You don't have to do $20 a week. You could just do that, like, year-end thing. I think the combination of the- Yeah ... no says, "Oh, I'm, I'm always putting something away, but when, when I have that, that bigger time to make a decision, I'm also maximizing what I can do." Yeah. Objectively speaking, and I sort of only really thought of this question just now, but for small business owners, what would we be looking for in a super fund?
Because I'm also thinking about small business specific accountants is really important, I think, because we've had some shocking accountants, and we've also had some really good ones. What are you looking for in an accountant, and what are you looking for... As a small business owner, I mean, speaking from a superannuation perspective.
And then what are you looking for in a, in a superannuation fund? Because, like, I just know I just chose, I just got put [00:30:00] into mine when I was, like, 20 years old- ... and, like, I've never asked it. I'm pretty sure that the plan I'm on is called aggressive, which sounds risky. But anyway, what, what are we looking for?
Like, really simply so that people, people know that they're getting a good deal or perhaps they're just... It's, it's the same as choosing a bank, right? You just stay with what you know and you don't ask questions. I think when choosing an accountant, you want someone that understands small business. Like, I will say that.
Mm-hmm. You want them to have an idea of exactly what, how cashflow is contributing to that end year, end of year outcome. Mm-hmm. And that can help you kind of go, "Okay, well, this is how much you could put away. Is that the priority?" In terms of superannuation funds, look- A lot of superannuation funds are really good now.
Mm. And- They're quite heavily regulated obviously, so they can't do what they used to do. It is. I don't want to ... I, I think, I think AMP's got a great super fund. But I, what I would say is you want a super fund that's gonna help you prepare and think about what retirement looks like. So [00:31:00] a lot of funds now offer phone-based intrafund advice, it's called, where, you know, y- you don't have to necessarily rely on the account.
You can call up and they can help you about, okay, what a contribution strategy could look like- Right ... and what it can mean for your retirement. AMP offers that as a digital service- Mm ... but not every fund does. Mm. So that means that you can kind of do it on your couch. We've had people logging in and doing digital advice on superannuation on Christmas Day.
Yeah. So- Wow ... like- So instead of paying your accountant 500 bucks for the hour, you can now get basic advice. Basic advice- Yeah ... which actually says- It's nice ... "Okay, what if I did this? This is what the impact would be on my retirement." Yeah. Which can kind of help you to shape up what, really see what your future could look like.
Yeah. And so I, I think that that, and that's for f- at least with our fund, that's a free service. Yeah. So if you're a member, you can just do that online whenever you want to. Yeah. Okay. Good advice, and it's good to know that superannuation's now... I mean, we all know that it's heavily regulated, but, you know, back in the day it was a bit of a [00:32:00] free-for-all, so it's nice to know.
It, all the funds are, all the funds are pretty good. Yeah. So I think that you, you want to find one that feels right for you. Yeah. Like, and, but I, I, there's, there's a lot of, there's a lot of really good kind of guidance out there from funds about what you can do to maximize your contributions and things like that.
But you need to think about, as a small business owner, what's right for you. So what about if you, I've got listeners to this podcast who maybe don't have a f- they can't forecast income week to week, or it's like a really lumpy kind of invoice payday, so they might, summer's their peak time, and then they might make a minimal amount during the rest of the year.
H- how do they manage- You know, I guess a regular contribution to their super or like you say, do they wait to the end of the year and just put in that, what'd you call it, a concessional- A concessional contribution ... contribution. Look at me. Yeah. Um. Are they disadvantaged for that? Like, is there anything, so the basics that people would know who are thinking, "I don't, I really don't think it's possible for me," [00:33:00] particularly right now with inflation, interest rates, like people who are just literally hanging on.
What, what, what then? Look, I... Look, there, there, there's a component here which is, is your cashflow gonna be enough that if you get to the year, kind of like financial year-end, can you, can you make a contribution? The answer for you might be no. There is then concessional catch-ups. Right. So there is options where if in future years you in fact do have more money, then you can actually make, you can make more contributions.
And retrospectively it applies. Yes. So it, it, it applies still in that year, but it, you actually have, rather than the smaller cap, you get a bigger cap, which is, that's nice. Mm-hmm. And it's really designed for small businesses. Right. It's designed for people who haven't been able to make that year-on-year contribution, and so how can they actually prepare for retirement?
And so there's that aspect as well. I would say there is [00:34:00] no right size. There is if you can make, you know, week-to-week contributions, great. If you can make or at least set aside some planning- Mm-hmm ... you know, at year-end to make a decision about it, but if nothing else, you can also do some catch-up contributions at a later point in time.
Okay. So are there any other government incentives or tax advantages if a, if a business is struggling that they might qualify without Yeah. There's, there's also co-contributions. Ooh, let's talk about that. Look at me. When the government gives you money, I mean, I love that. Yeah, that's good. Sign me up for that.
So that's when your taxable income is just below, like the, the higher cap is just, just below $65,000. Mm-hmm. And so essentially if you make a personal contribution, so that's not a concessional one. Yeah. That's n- so you're not making a tax deduction on it, then the government can pay you up to $500. Right. So that can be one way you- Per contribution, they'll match it.
No, it's for the year. Oh, for the year. Yeah. Bummer. [00:35:00] Right That'd be great That would be nice But no. Okay, Alba, are you listening? Okay, so there is that, a co-contribution as well. Anything else, I guess I'm talking from the perspective of the current landscape, yeah, right now. Is there anything else that small business owners who are potentially kind of just making ends meet should know about or ask their accountant about?
I think, look, and this would be, again, be another personal experience one, but I think spouse contributions- Mm-hmm ... and spouse contribution splitting is another option. So if your spouse isn't, isn't in the same kind of, they're not a small business owner- Mm ... but in fact is employed, then you can actually split contributions.
So- Right ... there's a real chance to kind of make sure that you're both contributing 'cause, you know, in the y- you're a partnership, you're, you're kind of, your superannuation is a kind of a collective asset even if you split up. Yeah. So you can actually start to grow them together. And so that is an option.
[00:36:00] So does that mean if they've got a job and they're an employee, they're automatically obviously 'cause they have to make their contribution, but it gets shared with you and part of it is counted as your contribution? It actually, it's, it's still their contribution- Yeah ... but yes, it gets split into your account.
Yeah, right. Okay. Yeah, so you can nominate into doing that. Yeah. Your spouse could also make contributions for you. Just before we finish, if there's a small business owner listening to this who is like me and getting like in the moment and going, "Right, I've got to pull my finger out, get my head out of the sand.
I need to face the music." As anxiety-inducing as it is or, but no matter how far behind I think I am, I'm, I'm gonna, I've listened to Julie and I'm inspired to get on top of my super. What are some practical things that they could do today or tomorrow or this week to kind of move the dial and, and, and get themselves in the right mindset and set themselves on a better super path?
I think pick a fund, get some advice. So understand what putting some contributions in can look like for your retirement. Then put in a timer for [00:37:00] next May, June, and book an appointment to kind of plan out what you might be able to do at that point in time. Mm-hmm. If you get to that point and you don't have the cash flow, then that's fine.
But at least you can feel prepared that- Mm ... you are facing into, this is, this is my tax year. How do I actually take advantage- Mm ... and get the most I can from my combination of my cash flow from my business, my superannuation retirement, and from the government? Let's minimize that tax- Mm ... and just feel prepared.
Yeah. So if they've got a, a fund already, I would say to, you know, call the fund, find out what their balance is. As much as you may not wanna know, find out what the balance is, perhaps get some preliminary advice from them, shop around. Yeah, like see if they've got advice available. Yeah. So a lot of funds, you can talk to someone and they can give you simple contribution advice so you can kind of understand what you might be able [00:38:00] to do- Yeah
and what it can mean for you for your retirement. It's worth asking if they've got it. Otherwise, you might shop around. But figure out where your balance is and then what contributions you could possibly make and what it would look like in your retirement. Yeah. So a, a bit of a short-term plan and then a longer-term plan once you've got your head around it.
And then get yourself a good small business accountant. Oh, absolutely. Yeah. Yeah, the right accountant to just actually really plan, not just to submit a tax return. Yeah. And then a financial planner as well, financial advisor, or is an accountant enough? I think a financial planner is absolutely critical if you're thinking, if you're thinking about your small business as a retirement plan.
Mm-hmm. If that is the strategy you've got, you absolutely need a financial planner to make sure that the structure is right and that you are, you will really be able to maximize how much of that asset that you've spent so long building up you can actually use for your retirement. Mm, and there's no surprises at the end.
You do not wanna [00:39:00] end up not being able to get, like, a CGT discount that you've been banking on, because paying an extra $100,000 to the ATO- Yeah ... that you didn't expect, $100,000 is an incredible amount from a retirement perspective. You know, that is, from a lifetime kind of income perspective, you could be getting an extra kind of $10,000, like, each year from that $100,000 if you invest it right.
Mm. So, you know, you wanna make sure that you're not paying that to the ATO if you can avoid it. Absolutely. Thank you, Julie. You have enlightened me about all things superannuation. I still need to go and get my head around some terms, but thank you so much. Welcome. It's been a pleasure having you. Thank you.
Thanks for listening to What I Wish I Knew About Small Business Before I Started, a special six-part miniseries brought to you by my Media Magnet podcast. If this episode helped you, make sure to follow Media Magnet wherever you get your podcasts and go back to catch the other episodes [00:40:00] in this series.
And if you know a small business owner who's learning everything the hard way now, please share this episode with them. It might be exactly what they need. This series is sponsored by AMP Bank Go, supporting Australia's small businesses. I'm Liz Nable, and I'll see you in the next episode
