The Aged Care Insite guide to making good financial decisions

The dedication of our aged care workers underpins the quality of life of countless older Australians. But while you’re busy caring for others, who’s looking after your financial health?

Making informed financial decisions is a lifelong journey, one that evolves with each stage of your career. Whether you’re just starting out, firmly in your mid-career stride, or contemplating a well-deserved retirement, understanding your financial landscape is paramount.

This guide aims to illuminate the path, offering practical insights for every stage.

Your first job: Building the foundation

Stepping into your first aged care role is the ideal time to establish sound financial habits. It’s crucial to balance your immediate financial goals with long-term planning.

Intrafund advisor Lucy Claxton, who is part of Verve Super’s in-house financial coaching team, noted that for young professionals entering the workforce for the first time, financial goals are a balancing act.

While, paradoxically, the earlier that you can contribute to super the better, Ms Claxton acknowledged that “the reality is, is that when you’re younger […] you’re just not going to have the extra cash.”

“Super and then retirement can feel a long way off for young people and there's always going to be other goals that need to be considered first.

“Whether it's building up an emergency fund, whether it is saving for your first property, whether it's saving for time out of the workforce, family planning as well [...] obviously they're more immediate goals. So there does have to be a balance with that one.”

Superannuation might seem a distant concern, but understanding its basics now will literally pay dividends. Ms Claxton highlights that many new professionals, especially those who’ve previously only had casual jobs, might have super in a few different places.

“The first step is actually understanding where your super is, which you can do through myGov, and then thinking about consolidating and having it all in one place,” she said.

“Just ensure that you actually complete the super choice form [when you start a new job], so that you can make sure that your super guarantee payments are actually going into your super fund.”

This is a vital step to save on fees and capitalise on compound interest.

However, when consolidating super accounts there are a few important considerations. For example, you may have insurances linked to your account that you want to hold onto, so check these first.

Although superannuation is a trillion-dollar industry, in her time as a financial advisor Ms Claxton has noted that many people are not really engaged with their super; they might not actually understand that it is invested in the share market, or know what shares it is invested in.

She suggests considering whether your investments align with your values, whilst also suggesting that your age should also factor into your investment portfolio.

This is of particular interest to her, as Verve Super's ethos is about “creating a future that's actually worth retiring into” through ethical investment choices that reject fossil fuel companies and puts your money to work for gender equity and sustainability. It was also set up by women, and looks at super through the lens of what is good for women and gender diverse people.

“It tends to be the case that younger people can afford to consider a higher growth or a higher risk portfolio because they've got time in the market,” she explained.

Australian government initiative Moneysmart is a great starting point for those wanting to learn more and make confident money decisions.

Mid-career: Growing your wealth and managing life’s demands

As you progress in your career, your financial web will likely become more complex. You may be juggling a mortgage, family expenses, and perhaps even considering further education or a career change.

This stage is about growth and protection, but it’s also where systemic challenges can become more apparent.

The Australian aged care workforce is overwhelmingly female, with women making up a significant majority of direct care roles such as personal care workers and registered nurses.

This strong female representation is a long-standing characteristic of the sector and has often been cited in discussions around the historical undervaluation of aged care work, contributing to broader conversations about the gender pay gap and the need for equitable remuneration in predominantly female-dominated industries.

Dr Gemma Doleman is a registered nurse and research fellow at Edith Cowan University, she explained that the nation's gender pay disparity is deeply rooted in historical gender assumptions, where skills such as “emotional labour, communication and care have traditionally been seen as natural for women and less worthy of financial recognition.”

These patterns contribute to women in care roles taking home less income, affecting their financial independence and ability to build savings, and ultimately leading to significantly lower lifetime earnings and superannuation balances.

“On average in Australia, women retire with 25 per cent less superannuation than men,” Dr Doleman said, with female aged care workers being particularly vulnerable due to career interruptions and their tendency to choose part-time work.

“These factors not only impact financial security, but they also increase the risk of economic hardship in retirement,” she added.

Navigating time out of the workforce

Career interruptions, particularly for childbirth and caregiving, are common for Australian women, however, Ms Claxton highlights several strategies to help mitigate the financial impact during these times:

• Check admin fees: Some super funds have policies in place that mean they will refund a portion of administration fees if you are taking time out of the workforce for family planning. Anyone who is considering taking time out of the workforce for any reason should contact their super fund to see what's possible.
• Keep insurances active: If you do have insurances within your super account, and you are not making contributions for a period of time, your insurances may be at risk of lapsing.  Consider either making a contribution (even just a dollar!) to keep the account active or filling out the appropriate paperwork to opt in to keeping insurances active.
• Contribution splitting: If you have a partner, contribution splitting allows them to split their super contributions with you – your spouse may be able to transfer up to 85 per cent of a financial year's taxed splittable contributions.
• Spouse contributions: This is different to contribution splitting in that it means your spouse can make a direct non-concessional (post-tax) contribution to your super that they then may be able to claim as a tax offset.
• Government co-contribution: If your income is below a certain threshold, and you decide to make a non-concessional contribution into your super account, you will be entitled to up to $500 in government co-contribution. As a bonus, the co-contribution is processed automatically, so you do not need to do extra paperwork in order to benefit.

With any time out in the workforce, Ms Claxton recommends engaging with your super provider to find out what is available in your specific circumstances.

Boosting your super

If you reach a position in your career where you are able to contribute more to super, salary sacrifice is a popular option.

“I quite like salary sacrifice because it means that your employer is taking your pre-tax income and contributing it into super on your part,” Ms Claxton explained.

“You get the advantage of contributing and building your super balance but also paying less tax as a result.”

You can also make voluntary contributions into your super at any time, however, Ms Claxton warns that the right type of contribution depends on many other factors.

“It depends on what your income is for that year, it depends on how much your employer is already paying on your behalf because there are certain caps for each type of contribution.”

Home ownership and investment opportunities

For those looking to buy property, Healthcare Home Loans’ head healthcare lending specialist Carla Nesci pointed out a number of unique opportunities for people working in aged care.

Healthcare professionals and essential workers can take advantage of bank policies that allow them to buy with as little as a 10 per cent deposit, get larger loan sizes, and, in some circumstances, not have to pay Lenders Mortgage Insurance (LMI).

Ms Nesci explained that for those who work in the Australian healthcare system, banks will take 100 per cent of overtime and penalty shift rates and any bonuses into account when assessing their borrowing power, which is a major advantage over other industries often see their income ‘shaded’ by 20 per cent when applying for a traditional home loan.

Furthermore, aged care workers may also be eligible for discounted interest rates.

“If you put, as a nurse or a doctor or anyone that works in healthcare, a 10 per cent deposit forward, you'll be paying interest rates as if you've put a full 20 per cent deposit for it, which sometimes looks like a 50 basis point discount, which is huge,” Ms Nesci explained.

Ms Nesci encourages anyone who is feeling apprehensive or confused by the housing market to proactively engage with professional advice.

“If you want to get into the market in the next few years, I’d be talking to a mortgage broker sooner rather than later,” she said.

“It takes away that fear, because taking the first step forward is having that conversation so you understand.

“Otherwise, if you don't understand, you're going to sit in this state of, ‘I don't know what I can and can't do’, and that limits you.”

This early conversation can help you understand costs, applicable policies, and steps to prepare. She suggests calculating potential mortgage repayments and saving the difference between that and your current rent to build good financial habits quickly.

“Talk to a professional [...] because we're able to show you what's possible.”

Winding down: Securing your retirement

The prospect of retirement, even if years off, requires careful planning. This stage is about consolidating your assets and ensuring a comfortable transition from full-time work.

“The best time is yesterday,” to start planning for retirement, Ms Claxton says, but realistically, “the home stretch would probably be from age 50.”

“That's when you've still got 10, 15 years until you're planning on accessing super and that gives you a really good lead time to start maximising contributions, if that's viable for you.”

For those nearing retirement, focus shifts to understanding your superannuation options and how to best draw an income, whether that’s an account-based pension, the age pension, or a combination, the right strategy depends on your individual circumstances and desired lifestyle.

How much super do you need to retire?

The answer to this question is highly personal, and depends on so many factors, including where you live, whether you own your home, if you have dependents, outgoings, and many others. However, the Association of Superannuation Funds of Australia (ASFA) retirement standards are a great place to start.

ASFA publishes quarterly budgets for a ‘comfortable’ versus ‘modest’ retirement, providing an idea of the combined or single super balance needed.

“That can be a really good benchmark to understand if you are on track, but then in terms of actually how much that person is going to need, it really depends on what they value and what type of retirement they want,” Ms Claxton said.

Other things to consider when heading towards retirement include:

• downsizing your home, which can free up capital and reduce ongoing expenses – seek professional advice on the tax implications of selling assets and accessing your superannuation.
• estate planning, including wills and powers of attorney that ensure your wishes are respected and your loved ones are provided for.
• understanding your age pension entitlement. The age pension kicks in from 67, and importantly, it excludes the home you live in when calculating your entitlements.

Empowering your financial future

From your first pay cheque to your final shift, your financial journey working in the Australian aged care sector is unique. While the demands of your profession are immense, dedicating time to your financial wellbeing is an investment in your own future.

Seek advice, stay informed, and empower yourself to make decisions that will support you through every stage of your career.

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*Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. Always seek your own professional advice that takes into account your personal circumstances before making any financial decisions.