Financial planning is really about… helping clients decide whether and how to take a break from work

If a person starts work at the age of 20 and works to retirement, then they can look forward to up to 47 years in the workforce.

For most people, this 47 years will include some sort of break. The most obvious break is to have children, with women much more likely than men to take time out for this purpose.

Australia uses a system of forced saving for workers. It is called the super guarantee. All employed Australians must have a percentage of their earnings contributed into super on the behalf.

Obviously, if a person takes time out of the workforce there will not be an employer available to make these contributions. This will have a dampening effect on the client’s super savings and, eventually, their readiness for retirement.

ASIC provide a Career Break Super Calculator that can be used to estimate the impact on a person’s super if they take a full or partial break from paid employment. The most obvious use is to help families calculate the impact on super of taking time off to care for other family members. But the tool can also be used to calculate the impact of other breaks, or the impact of moving to a lesser salary or a part time employment basis.

The calculator will tell the client how much their super is reduced by, as well as showing this as a percentage. It can be a very handy tool to help clients plan for breaks from work.


The Dover Group