Ten super superannuation tips – ideas to increase your retirement savings
A recent survey shows eight in ten Australians are worried they won’t have enough superannuation savings to fund the lifestyle they want.
Is there anything you can do?
Yes, there is. Here are some superannuation tips for boosting your all-important retirement savings.
- Focus your longer term investment efforts on superannuation – here’s why:
The tax benefits of salary sacrifice and lower tax on superannuation fund earnings
The difficulty of accessing your super savings prior to retirement – a good thing believe it or not, as it’s all too easy to dip into normal savings
2. Consolidate your super accounts to eliminate duplicate fees. Use the ATO’s tool to find any lost super.
3. Check what fees you are paying. Shop around and perhaps consider moving your super. An extra 1% per annum may not sound like much … until you multiply it by the next 25 years and realise you could be talking about thousands of dollars at retirement.
4. Think about salary sacrificing to top up your superannuation guarantee contribution – currently at 9.5% – to take it to 12% per annum. This is the level initially intended – and considered by some to be sufficient to cater for a comfortable retirement. Currently (unless the timetable is moved again) the guarantee level is due to rise to 10% in 2021 then gradually to 12% by 2025.
5. Make enough of an extra contribution to receive the Government Co-contributions. If you’re a low or middle-income earner and make personal (after-tax) contributions to your super fund, the government may also make a contribution (called a co-contribution) up to a maximum amount of $500. The amount of government co-contribution you receive depends on your income and how much you contribute.
6. Consider contributing all or part of your next pay rise or bonus as a tax-effective salary sacrifice super contribution or concessional contribution.
7. Contribute up to $3,000 to your spouse’s super – if they earn less than $13,800 – to receive a rebate of up to $540.
8. Check that your investment strategy matches your age. The further from retirement you are, the greater the risk you should be prepared to tolerate (because short term market fluctuations will be less relevant) potentially boosting your overall returns and final balance
9. Make concessional contributions, personal contributions up to $30,000 ($35,000 if you are above 49 years of age) receive tax concessions.
10. If you are over 55, consider a “transition to retirement” strategy, whereby you make greater super contributions, offsetting the lower income by drawing from your super fund – potentially saving thousands in tax.
Remember though, superannuation, pension and tax laws are complex, so before making any changes to your superannuation arrangements, we recommend you seek professional advice.
MAKE SURE YOUR SUPER FUND HAS YOUR TAX FILE NUMBER
This will maximise the tax effectiveness of contributions to your account. It will also make it easier to track multiple super accounts.