Effie Zahos is one of Australia’s most respected finance journalists. Having been at the helm of Money magazine since its inception in 1999, her finger is glued to the pulse of all things finance.
Here, we speak to Effie about the changing themes and enduring issues that people face when it comes to managing money. As you’ll quickly discover, it’s clear that she’s passionate about educating people about their financial futures – and that she’s a strong supporter of super.
Q. You’ve been editor of Money since its very first issue in 1999. What were the hot topics back then? What themes remain timeless?
The first cover of Money is forever etched in my mind! Paul Clitheroe was on the cover, and our headline was ‘Shares: getting it right’. Not much has changed when it comes to financial themes and topics!
When it comes to money, I’ve learnt that while the product and environment both get more complicated, people’s needs remain the same from generation to generation. Early on, they want to travel. Then, they want to buy a property and send their kids to the right schools. Then, then want to live comfortably in retirement.
Finance is, and always has been, about meeting these wants and needs. How do we make the most of what we have?
What has changed is the complexity of the environment. Issues have been amplified, markets are crowded, and there’s a lot of confusion out there. It’s becoming harder to help people decipher it all, particularly as everyone becomes more time-poor.
Q. What about super? In 20 years, it’s gone from being a very new concept in people’s minds, to the accepted strategy for retirement savings.
If Money had run a cover featuring superannuation in 2000, it simply wouldn’t have sold. Today, it’s one of our best-selling covers. People understand the importance of super – even the Gen Y kids for whom retirement is a long way off.
We now have dedicated columns on super. People show an interest in everything from self-managed super funds and innovation in investing, to insurance within super. Ten years ago, they wouldn’t have been interested.
Yet, even though people have a greater thirst for knowledge about super and their retirement income, there’s still not enough action being taken to boost super savings. Look at salary sacrificing – a great, tax-effective strategy for increasing your super savings. Yet the number of Australians who salary sacrifice remains low.
Q. Whose responsibility is it to change this?
I firmly believe that the buck stops with you. It’s your money; you should be taking care of it. No-one else has your best interests at heart like you do. There are great tools like the Super Guru website, which has plenty of resources to help you take charge of your super.
Of course, the government, your employer and your super fund should all play a role, too. It’s in the national interest that we get super right, for everyone’s benefit.
Employers should make it as easy as possible to help employees salary sacrifice, by making it available, providing tools and education. They should also free up one hour every six months to let employees research their super and make sure it’s on track. This simple strategy would benefit the economy as a whole.
Q. What about women and super? What do you think could be done to close the gap between men’s and women’s super savings?
It’s a fact that women will retire in poverty if the gap is not closed. We live longer, we’re out of the workforce more, and we get paid less for the same jobs as men. Right now, there’s a 19% pay gap between men and women, and the super gap is 40%. The average woman is retiring on $112,000; for men, it’s $200,000.
The government could work harder to close this gap. For example, they could get rid of the $450 threshold – under which casual workers don’t get paid super. Many women can only do casual work because of their responsibilities at home.
If we don’t get the support of the community and government, then the super gap will widen. But, again, the buck stops with the individual. Women need to take initiative – and find ways to boost their own super given they can’t change policy.
This could include making sure they haven’t over-insured within super, and making sure they’re in the best super fund with the best net return. These are all little things that women can do to boost their super.
Q. You’re an expert at educating people about their financial future. So let’s finish with your top 3-5 tips for retiring comfortably.
The most simple piece of advice – and the most effective – is to spend less than what you earn. It’s a no-brainer, but you’d be surprised how many people can’t stick to it.
Then, I would reiterate salary sacrificing. Start early – even if it’s just $20 a week. If you can’t afford to salary sacrifice, you can at least take an interest in your super.
Finally, don’t be afraid to get help. Some of the most successful people have a team of helpers around them, and there will always be someone out there that can help you and your situation.
Call AustralianSuper on 1300 697 873 or get in touch today if you have questions about super for your business.
Statements made by Effie Zahos have been reproduced with her continuing consent. This is general financial advice only and does not consider your personal objectives, situation or needs. You should read the PDS and other relevant information at australiansuper.com to see if it is right for you. Prepared by AustralianSuper Pty Ltd ABN 94 006 457 987, AFSL 233788.