News

How this self-employed muso got on top of his super

10 September 2018

Supporting a family saw Ric Mills decide it was time to plan for the future. By Sylvia Pennington.

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Composer and musician Ric Mills (pictured above) is focused on securing his financial future by making regular contributions to his superannuation fund, as he juggles the demands of a multifaceted creative career.

The 41-year old former Brit has called Australia home since 2005, after a holiday here segued into a series of musical and teaching gigs. Now a citizen, he and his wife Priscille, a project manager, live in south-western Sydney with their two young daughters.

Mills balances providing after-school tuition at Octave8, the music academy he founded three years ago, with completing assignments for advertising agencies and corporate clients and composing orchestral trailer scores for music corporations.

Like other self-employed Australians, he is not required by law to pay into super. However, he chooses to do so, through regular lump-sum contributions.

“A lot of musicians who are doing it for a living have a plethora of things going on, and that’s pretty much me,” Mills says.

“I started doing formal teaching after finishing my degree, and here in Australia I taught at TAFE for a few years. My super was looked after by my employer but, as the jobs were only casual, I didn’t get the same benefit as someone employed full time.

“With other freelance work – composing and gigging – obviously you have to look after your finances yourself.”

Planning can be a challenge when income is uncertain, and having a partner in stable employment helps keep the family finances on an even keel.

“I can never say to my accountant that there’ll be a certain amount coming in each year, because there never is,” Mills says. “It’s always changing – hopefully it’s mostly on the rise, but you do need to be prepared for troughs.”

Lean periods notwithstanding, Mills contributes to his super each quarter, despite not being particularly finance-oriented.

“My wife is much better at that side of things than I am,” he admits. “I make sure I have the money, and she does something with it. We have a plan and she makes sure we stay on track.”

The super shortfall among the self-employed

Historically, self-employed Australians have lagged behind their counterparts on salaries when it comes to saving for retirement.

In the run-up to retirement, the self-employed have around half the superannuation of employees, according to The Association of Superannuation Funds of Australia (ASFA).

The difference in super balances between self-employed and salaried workers runs to six figures by the close of their working lives. Salary-earning men aged 60 to 64 had an average balance of $282,643 in 2015–16, while self-employed men in the same bracket had an average of just $143,130, according to ASFA. 

For women, the disparity is even starker. The average balance for self-employed women aged 60 to 64 is around $83,000, compared with around $175,000 for wage and salary earners.

Getting serious about the future

Family responsibilities have made provisioning for the future an imperative as he and Priscille approach their middle years, Mills says.

“As a younger person, living in the UK, I wasn’t so great with money,” he recalls. “I didn’t have a partner with business acumen, I was in debt, and I didn’t even think about things like saving for the future.

“A lot of musicians I knew were the same – all they cared about was going out to play their next gig.

“There’s nothing like being married, buying a house and having kids to change things. The kids are a constant reminder that you’ve got to make sure that tomorrow is a good day.”

He also finds comfort in knowing his affairs are in hand.

“For me, feeling secure and content is about achieving the balance between being fulfilled by my creative work and operating as a viable ‘business’ which remunerates me sufficiently and allows me to work towards securing our long-term financial future.”

Ready to make a contribution?

To make a concessional (before-tax) contribution, speak to your employer about salary-sacrifice.

For non-concessional (after-tax) contributions or personal contributions (on which you intend to claim a tax deduction - you must notify the fund), ANZ Smart Choice Super customers can make a contribution via BPAY.

Biller Code – 169060
Reference Code – member number (this is a combination of your ANZ Smart Choice Super BSB and account number.)