“A lot of people become freelancers by choice to maintain a healthy work-life balance,” he says.
“But probably the worst enemy of people starting their super is the dreaded ‘p’ word: procrastination.”
He says freelancers need to always be looking out for their post-career lives.
Retirement is always coming for you while you’re busy working on building your career, but you must remember comfortable retirement is the end goal for all careers.
The Australian Super Fund Association tells us self-employed and freelancers are more likely to be slightly older in the workforce; between ages 50-64, and as many as 20 per cent of self-employed people have no super at all.
This means that these self-employed Australians are looking at very uncomfortable and very stressful retirement years in a short time.
What a lot of freelancers don’t know is the standard super percentage an employer pays is 9.5 per cent. A self-employed person can arrange that with their contracts or arrange that themselves on a monthly or annual basis.
Freelancing comes with benefits but there are some trade offs, and one of them is taking money out of pocket to put towards your own superannuation. For full-time workers this is automatically done by employers but for freelancers it can be stressful to take a bit of your own paycheck and put it aside for later.
It’s as simple as taking money and putting it away. The main thing that’s stopping most people with this issue is themselves.
A tip from Black is to try finding a paying routine that works for you.
Some pay their super straight away. Some pay that 9.5 per cent when doing their invoicing.
Some do smaller jobs that would result in approximately 9.5 per cent of the pay they get for larger jobs and put 100 per cent of that away into a superfund.
The main thing to focus on is to develop a habit of paying towards your super.
This year’s events – bushfires, coronavirus, job cuts – have put stress on everyone and the thought of a long-term investment in this current climate seems odd. However, Black says the longevity of an investment in super is still a good idea and should be focused on more.
“If the past is any indication, the future of super will be subject to constant change,” he told the conference. “The ASFA has called for change to help secure superannuation with self-employed people as well.
“We are calling for a fairer superannuation, a step change in closing the superannuation gap.”