My superannuation strategy | 2021 - YouTube

hey friends welcome back to the channel my name  is sanji and today we're gonna go through my  

superannuation strategy now this video is  sort of third in my series of videos that  

i've done on superannuation did a video on the  basics around superannuation that's up there  

then i did a video around the leave is associated  with superannuation so what levers can you pull  

when it comes to super what are the key things you  can try and optimize for and your the benefits of  

that and some of the risks associated with it  and now this video is me sort of tying off the  

whole topic around superannuation and this  is my plan going forward and more probably  

for me to document it and have a record of what my  strategy is and honestly after this i don't want  

to do any more videos on superannuation because  it's a boring topic after a while you realize  

it's only a couple of things you can optimize  and then you just let it run for like 20 30 years  

this video i'm gonna go through basically where  i'm at give you a bit of context around where  

i'm at because that's going to be important  to you because your superannuation strategy  

should really be optimized for your situation  that's the difference between a youtube video  

and speaking to a personal financial advisor is  youtube videos just let's just hit everybody and  

hopefully some stuff sticks whereas when it comes  to personal financial advisor we actually pay  

money to see them they'll look at your specific  situation as okay based on your situation in terms  

of your income what you want to achieve your  assets currently and where you see your future  

in terms of your income this is what we advise  and that's why you pay them they customize it to  

you these youtube videos are just people casually  chatting about what they think works and hopefully  

you know it's relevant to you in some way i'll  then also talk about what my actual strategy is  

and the future of it and also some risks i see and  possibly some things you should consider for your  

own strategy i don't want to go too much into it  because i feel like that is financial advice but  

we'll touch on it along the way so let's get  into it so let me give you some context to my  

situation and this is important so you understand  how my strategy fits into my world i'm currently  

single and i don't really have a lot of  obligations another way of saying i earn money and  

there's not a lot of stuff the money goes towards  i don't have a mortgage i rent in a share house  

i my only debt is my hex debt and i've done  a video previously about that it's it's big  

don't get me wrong it's a big extent it's pretty  big considering i didn't study medicine but it's  

there and i've got a strategy around that another  thing to say is i'm not really looking to buy  

a house in the immediate term and i'm looking to  buy a house or a townhouse not really an apartment  

and because of that i'm sort of priced out of the  market if you're a single person trying to buy  

something other than an apartment in a you know  you know area reasonably close to the cbd there's  

not a lot of options the other thing i'll say is  i did spend a bit of time out of the workforce so  

i went to university graduated started working and  then i spent about two and a half years out of the  

workforce while i was doing a master's it did work  casually but for all intents and purposes i spent  

some time in the workforce and i say that because  my a little bit behind where ideally i would say  

it should be if i had kept working full time and  i've estimated that to being around 20 30 000  

so whatever my superannuation balance is  at now because i spend two three hours  

two three years out of the workforce it's about  twenty thirty thousand dollars below where  

i'd imagine it should be the final thing i'll say  is when it comes to my superannuation strategy  

i'll be a little bit ashamed to say i haven't  been optimizing it as much as i should have  

okay and you know etf's shares that's been a game  i've been in that game for a while and you can see  

a whole bunch of videos on that but superannuation  relatively new optimization strategy being in  

place so that connected with having spent  a bit of time out of the workforce i have  

unused concessional contributions of around forty  thousand dollars now this is important because  

this will help in terms of adding money into my  pre-tax contributions saving in tax and adding  

money into super and catching up a bit but i say  this because 40 000 is actually quite a lot for  

someone who should know better so for the five  people who are still watching this video after  

i said all that i'm like oh i'll still listen  to this person here's my superannuation strategy  

for the next few years first thing is i'm  going to try and max out the 27 and a half  

thousand dollars a year they will come through my  standard superannuation guarantees i'm also going  

to put in a little bit more through my pre-tax  to hit the 27 and a half plus i'm going to put  

a little bit more than that in as well probably  around 10 to 15 maybe to a 20 000 a year extra  

so i can use up that unused amount of  concessional contributions that i haven't  

used in previous years and the reason i want to  use those unused concessional amounts the 40 000  

from previous years is because if i don't use it  they'll expire i think you only get five years to  

use it i spent time out of the workforce so i want  to catch up on those two and a half years where i  

miss putting money into my superannuation  and thirdly i still find those tax savings  

valuable for me to use and if you want to find  out what your carry forward amount is for your  

unused concessional caps you can go to your mygov  website go to your ato account and there should be  

a section in there called carry forward unused  concessional contributions a bit of a mouthful  

but they'll have a little section there and  they'll tell you how much it is currently for  

this financial or how much you can use up all  together once i've used my concessional amounts  

and including all the unused amounts then i'll  just switch to maxing on the 27.5 000 a year or  

whatever it is in future years and that's because  i'll still see the benefits of tax savings there  

and you know if even if i do decide to buy  a house down the track i can still use some  

of that stuff from the first home super grant  as needed if i do all of that my estimate is i  

should be getting around a million dollars  in super by the time i'm in my 60s mid 60s  

and that's not like an amazing amount i'm pretty  sure for most people in their 20s and 30s if they  

do broadly what i'm doing you know catch up a  bit and then max out how much you can put in you  

should probably end up around a million dollars  now it's up to you to figure out whether or not  

a million dollars is how much you need now i'm  putting all this money into my superannuation  

account where is it all getting invested  get ready for a very straightforward answer  

i'm not going to do too much with it i'm going to  keep it probably in the host plus indexed balanced  

account i used to call it index diversified  apologies for that it's the index balanced  

account where they basically just put it into  etfs and have a little bit in fixed income and  

cash 75 25 i believe is a split between shares and  fixed income and cash i may consider in the future  

doing direct investing in terms of buying shares  directly through the option host plus lets you do  

i'm kind of not all that keen on it for now  mainly because i'm lazy and i haven't done enough  

research into it but i know that's an option  i know barefoot talks about that in his book  

the other thing i'd consider is when vanguard  brings out their superannuation product hopefully  

sometime in the next calendar year maybe then  i might consider switching over to that purely  

because i do see value in primarily investing in  ets even for your retirement but again it's your  

retirement you want to be careful you want to  be you know sensitive with what you can handle  

in terms of your risk appetite and even though  i talk a big game at the end of the day it is my  

retirement money so i'll probably end up sticking  to some pretty low risk but you know indexed  

etf options where i'll try and minimize  for fees and i say all of this in terms of  

my general superannuation strategy is kind of  lazy very conservative mainly because i think  

we should just try and minimize fees optimize  for tax because i think between minimizing fees  

and optimizing for tax that's really where  the big benefits of superannuation come from  

and in terms of returns let's just try and  achieve market returns you don't want to be  

below the market that's for certain you want to be  below 1 in your tracking index should be and don't  

worry about these cpi plus whatever percent things  that's that's very lazy we should be aiming for  

asx 200 a6 300 type returns because that's the  you know that's the alternative to where i would  

put my money for my retirement so that's you know  i don't have high expectations for returns and i  

worried when people like where do you invest  your money for your superannuation i'm like  

the benefits are really in optimizing for tax and  minimizing fees it's not so much in trying to beat  

the market through your super now let's talk about  some of the risks of my strategy what can go wrong  

one of the things is i'm putting quite a lot of  money into super and i can't really touch it until  

i'm retired or sort of mid 60s onwards that's a  risk now i'm managing that risk by also having  

money invested outside of my superannuation  so that if i do decide to retire early i  

have money that i can draw on there until i can  get to the point at which i can touch my super  

and there are better people out there who have  done better videos and excel calculators on  

this topic it's around how do you go from  where you are to where you want to retire  

to when you can invest in new super and  when you can access your superannuation  

and they've got various calculators that  can do that recommend you to look into that  

the other potential risk you might have seen  is you know how am i saving towards a house but  

putting so much money towards my superannuation  well you can sort of do both by the first home  

superannuation saver scheme and i'll put a link  somewhere or a picture around it up around here  

the thing is i can still probably get around  50 000 out of my superannuation towards that  

house in the future if i wanted it to so i'm  still getting some taxation benefits by pumping  

money into my super instead of saving outside  of my super the other thing is i am hoping as  

youtube grows and as other various projects  potentially in the future grow i can still  

earn that money and put it towards deposits  and houses as needed because the big benefit of  

putting money through your salary sacrificing is  the savings and tax other than putting money into  

your superannuation post tax so ideally you want  to try and put as much as you can pre-tax and then  

you know then put the benefits in post tax as well  if you really want to so i'm really just trying to  

maximize my pre-tax additions through my full-time  job here's something i'm not considering and i  

don't see myself considering anytime soon is the  smsf self-managed super fund and it was really my  

readings of what the barefoot investor said around  you know there's a lot of compliance costs around  

it and i'm just quite lazy in all honesty so i'll  probably stick to using superannuation funds for  

my superannuation account and you know if i really  want to tweak i'll probably use the smfs slide as  

barefoot investor called it by basically investing  directly through my superannuation account  

but still doing it within a large superannuation  fund and various superannuation companies will  

let you do this and it's where you can  basically buy shares using a super money  

so you don't have to set up your own fund you  can do it through the large superannuation funds  

now from what i've just said what are some  things you should consider i would encourage you  

to consider where you are financially speaking  in terms of cash flow obligations all of that  

i'd encourage you to check how much you have in  terms of unused concessional contributions from  

the last few years you can do that through your  MyGov site and i'll get you to consider as well  

you know where do you want that balance to come up  around how much you want to have in super that you  

can access down the track versus how aggressively  do you really want to retire now if you're really  

keen to retire as soon as possible then maybe  pumping a super is not that great an option  

not financial advice just something to  consider so when it comes to that balance  

generally i think if you want to retire as early  as possible you probably don't want to put that  

much in towards super because that's there's an  opportunity cost towards it whereas someone like  

me i'm not looking retired that early you know  yeah i want to retire at some point but not so  

early that i still enjoy my full-time job still  enjoy working i still have the idea of working  

maybe ask me in one year five years maybe it  will all change but for now i'm happy to work  

and so i'll set my strategy in that way and look  none of these things are as jeff bezos would say  

one-way doors you can always broadly speaking  reverse your strategy without going back too far  

so that's what i encourage you to  consider those kinds of things around  

where are you at what have you not used and where  do you want to end up in terms of your personal  

finances so that being said please do check out  some of my other videos around superannuation  

i really don't want to do too much more so  this is it if you want to monitor my strategy  

you know check out my instagram page and my  mailing list or probably write more about  

superannuation rather than do more videos on  it because like i said after a while it's just  

genuinely boring stuff so that being said  i'll see you in the next video bye for now

you