Wednesday, January 28, 2009
Saving
Now that I am going to have a job I'm setting up a regular savings plan of $A500 a month from my salary to match the plan we already have going for Snork Maiden which is also now $A500 per month. I'm going to invest it in the CFS Diversified Fund in an account inside of my margin account at CommSec. I'm not going to be adding borrowed money to this investment but rather it will help reduce the loan to value ratio on my loan over time. If my job contract includes required salary sacrifice into superannuation (i.e. employee contributions to a retirement fund on top of the employer contributions) I plan to also set up salary sacrificing for Snork Maiden. Her employer currently contributes 15.4% on top of her salary to superannuation (the legal minimum is 9% in Australia).
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4 comments:
Would you prefer to have superannuation or not?
By law in Australia employers must contribute a minimum of 9% on top of the quoted salary into a "superannuation fund". When I worked before for this employer (in 1996-2002) they contributed 17% and required employees to contribute 7% of their salary to super. That was the deal the union had struck apparently. This percentage of required retirement contribution (24% of quoted salary) is very high by Australian standards and downright bizarre by American standards :) I don't have a problem with it now but wouldn't contribute more than that to super (and lock it up for the next 16 years in my case and 27 years in Snork Maiden's case). Apart from trying to get the government's "co-contribution" which is a grant they give low income earners (like me because I'll only be employed for about 4 months of this financial year) who make extra contributions to super.
I'm a savings piggy, so that extra 9% sounds pret-ty nice. Then again, I suppose the employer can compensate for the additional cost by giving fewer (other) benefits or offering lower salaries to decrease the bottom line.
Yes of course, in Australia salaries would be lower to reflect the compulsory superannuation, everything else being equal. And university salaries all the more so given the huge superannuation component.
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