It doesn’t matter if you’re starting out, stepping up, or slowing down - adding a bit extra to your super savings now could make a real difference to your retirement.
Worried about not having enough for your retirement? The good news is you may not need as much as you think.
The latest statistics (as at September 2024) about the kind of money you need to retire on comfortably suggest $73,031 per year for a couple, and $51,814 if you’re single. A more modest standard of living means you’ll need just $47,475 a year for two of you, and $32,930 if you’re solo1.
To help get you to the kind of retirement you want, here are 10 ways you might boost your super savings.
Tax deductible contributions
You may be able to make voluntary, non-concessional (after-tax) contributions to your super on top of what your employer contributes. You may also be able to claim a tax deduction for these after-tax contributions, but you’ll need to be eligible. Also, the government puts limits on how much can be contributed to your super account each financial year—these limits are called contribution caps. See the ATO website for more information.
If your total income2 is less than $60,400 for the 2024-25 financial year, and you make voluntary, non-concessional (after-tax) contributions to your super that you haven’t claimed a tax deduction on, you could receive up to $500 as a co-contribution from the government*.
The amount of the co-contribution depends on your total income2, the type of contribution made (i.e. non-concessional/after-tax), residency status, how much you contributed, your super balance and age, and is determined by the ATO after you lodge your tax return. In most cases, the co-contribution is paid by the ATO directly to the super fund where you made the voluntary after-tax contribution.
You can ask your employer to add extra money to super directly from your pre-tax salary each time you get paid. This payment is on top of the super guarantee (SG) payments your employer makes on your behalf. The extra payments you choose to make are referred to as concessional contributions. Just let them know how much extra you’d like to put in. Contribution caps apply. See the ATO website for more information.
Salary sacrifice contributions are generally taxed at 15% which is likely to be less than your normal or marginal income tax rate*, unless your income and concessional contributions combined are more than $250,0003.
Did you know you may be able to grow your partner’s super and also get a tax rebate? It’s called a spouse contribution.
If your partner earns less than $40,000 a year and you make a non-concessional (after-tax) contribution into their super account, you may be eligible for a tax rebate of up to $540 per year on a $3,000 after-tax contribution. Even if you can’t get the rebate, you can still add to your spouse’s account and plan for your future together*.
If you sell the home that you have lived in for 10 or more years and you’re over 55, you can potentially top up your super with up to an extra $300,000 from your home sale – regardless of your work status, super balance, or other superannuation contributions made.
If you’re a couple, each of you could add up to $300,000 each, boosting your combined super balance by up to $600,000. There are some advantages, downsides, rules and regulations about downsizer contributions.
If your adjusted taxable income4 is $37,000 or less for the financial year, and your employer makes super contributions on your behalf, the government may refund the tax paid on those contributions back into your super account, up to a maximum of $500 per year.
If you’re eligible for the low-income super tax offset, the good news is, it’ll be automatically calculated by the ATO and deposited in your super account after you lodge your tax return.
Things change over time: your name, address, and job could be different and you might have lost track of some of your super. If a low balance account is inactive for more than 16 months, the super fund transfers your balance to the ATO for safekeeping. See the ATO website for more information.
If you have another super account or more tucked away, you could be paying multiple fees and insurance premiums. You might want to consider consolidating your funds into one super account. There are some important pros and cons to think about before you make a decision (e.g. loss of insurance) to consolidate your super accounts.
Understand your current spending habits
If you take a good look at your household spending, you might find a little bit of extra money available to add to your super savings. Every little bit counts, and you’d be surprised how quickly it all adds up. Also check your subscriptions for services that you may never use, or fees and charges from your bank or credit cards, for example. A quick tidy up now could really be worth it in the long run.
Tip
Want to see how much you might need to retire? No boring spreadsheets or lengthy calculations! In a few simple steps you can create a personalised financial target.
Rest invests money into various assets that perform differently over time, so their returns will differ too: some are more conservative or risky than others. How you feel about risk will come into any decision to change or adjust your portfolio. At this time of your working life, it’s important to weigh up your investment options carefully. You can make use of our Investment Choice tool^ to help you.
Is your insurance right for you right now?
Insurance inside your super is one of those things that’s easy to set and forget. But if it’s been a while since you checked it, take a few minutes to review it…there are premiums you might be able to stop paying or reduce, but you may lose some features and benefits you currently have if you do change anything.
Rest’s Advice# team is all about helping make super and retirement easier by building a plan to meet your goals. Our team of qualified financial advisers may provide you with simple, personal advice at no additional cost.
For more complex financial advice, a fee may be involved, but we’ll always discuss this with you first. It’s a good idea to speak with a financial adviser before making a decision. Book a financial advice appointment, and a member of our team will give you a call to understand your needs.
*Tax treatment of super is complex and may change. Any tax related information is general information only. Preservation rules prevent a person from accessing their super until they meet a condition of release (i.e., reach your preservation age and retire). We recommend you seek tax advice from an accountant and financial advice from a licensed financial adviser.
^ Rest Digital Advice (The Investment Choice Tool and The Contribution Optimiser) is provided by Link Advice Pty Ltd ABN 36 105 811 836 AFSL 258145 (Link Advice).
