February 1 2023

How do I make the most of my super in my 40s?

They say life begins at 40. So why not use this time to prioritise your future? By focusing on maximising your savings and building your super today, you could be on track for your dream retirement.
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As you move closer to retirement, your super may be one of your most important financial priorities. So, it’s important to take the right steps now to build on your financial foundation and get on track for retirement. Here are 5 ways to help optimise your super in your 40s.

1. Look at your retirement goals

When it comes to retirement planning, it’s worth being an early bird. Have a good think about your goals so you can get an idea of how much you’ll need to retire.

One way to start planning is to see if there’s a gap between what you might have when you retire and what you need for a comfortable retirement. To get started, you can use our superannuation calculator to give you a general idea of how much super you could have to spend in retirement. You can also check out the research by the Association of Superannuation Funds of Australia (ASFA) on retirement standards. Of course, these don’t take into account your personal circumstances, but they’re a good place to start.

Learn more about retirement planning

2. Consider adding a bit extra to your spouse’s super

If you have a partner on a lower income, one option you might consider is to boost your partner’s super by making a spouse contribution. The main benefit of doing this is growing your spouse’s balance in the lead-up to their retirement.

Before making a spouse contribution, you should consider you and your partner's financial circumstances, contribution caps, and any tax issues. Consider getting financial advice before deciding if spouse contribution arrangements are right for you and your partner.

You may be able to claim an annual tax offset of up to 18% (maximum of $540 for a $3,000 contribution) on an eligible spouse contribution. The tax offset reduces as your partner’s income increases above $37,000, and completely phases out at $40,000 .

Eligibility criteria applies.

Learn more about eligibility for spouse contributions

3. Consider salary sacrifice contributions

Want to top up your super balance? One way to do this is to set up a salary sacrificing arrangement with your employer. This is when your employer pays some of your before-tax salary directly into your super. By putting away some of your before-tax earnings into super, your contributions could be taxed at a lower rate than your personal rate. Just be careful that your salary sacrifice doesn’t cause you to exceed your annual concessional contributions caps.

Find out more about salary sacrificing

4. Consider combining super accounts

If you have more than one super fund, it may be worth considering combining them to cut down on multiple fees. Consolidating your super accounts means all your retirement savings will be in one place, so it can also help make it easier to manage.

It’s important to remember that giving up one or more of your super funds might also mean you lose benefits like certain insurance cover or experience inferior investment performance. So before combining your super, make sure you compare all your options and choose the fund that’s right for you. Check out the fees and costs of your other fund(s) plus any benefits that would be lost, such as insurance cover. Make sure your other fund knows about any contributions you intend to claim a tax deduction for, before combining. If you have any questions, speak to a licensed financial adviser or visit the ASIC MoneySmart website for more information . 

5. Evaluate your investments

As you get older, it’s natural that your goals and investment profile may change. That’s why it could be wise to go over the key details in your super each year. Things to look out for include:

  • where your super is invested
  • how much risk is involved
  • whether it’s appropriate for your goals at this time.

Learn more on reviewing your investment risk

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