There are plenty of ways to increase super contributions before your retirement at any time of your life. As the means of funding your downtime after retiring, you want to make sure your superannuation is ready.
The Australian Taxation Office recommends that you should check how you can maximise your super at the bare minimum of 10-15 years before the age that you hope to retire so that you have the time you need to make a difference to your final super balance.
Your preservation age is the age that you can access your super. If you were thinking of retiring then, your superannuation should reflect the amount you want to access to fund retirement.
While starting earlier means, it may be easier to accumulate what you need to retire by the time it occurs. It doesn’t mean that there’s a cutoff date or a deadline to have contributions in for maximised profits.
Here are three simple ways to make a difference to your superannuation fund, which could impact your balance for retirement in the long term (and the sooner you try them, the better).
How to Increase Super Contributions by:
Salary-Sacrificing
Your employer has to contribute 10% of your taxable income to your super each year by superannuation law. The extra contribution allows you to build up a steady balance as you work without actively contributing yourself.
However, suppose you have a position that pays well enough and allows you to do so. In that case, you may also be able to speak with your employer about arranging for some of your income to be ‘sacrificed’ to your superannuation and contribute additionally to the balance yourself. These types of contributions are concessional contributions.
So, for example, your employer may pay you $1,500 as your base salary pay. They also make the 10% contribution for your superannuation and pay $100 in tax. That leaves you with $1350. If you elect to salary-sacrifice, you might wish to pay $100 from your before-tax income. This means that instead of paying tax at a $1,500 base salary, you’ll only pay tax on the $1,400.
Track Down & Combine Your Accounts – Increase Super
There are measures to prevent additional super funds from being created for new employees who don’t elect to nominate a super fund – for those who may have existing multiple super accounts. It’s time to consolidate and combine them.
You can increase the rate that your super grows each year due to the compounding effect. Through additional balances available and fewer fees, ensures that your nest egg grows. You need to check that you don’t lose out on any benefits by transferring or consolidating to your chosen fund.
Tax & Super Can Work Great Together, If You Know How
If you are willing and ready to start saving, your superannuation can become a tax deduction gold mine. The catch is that you need to be eligible for the deductions that you are applying for.
One such deduction is the spousal contribution deduction.
If you contribute to your spouse’s super (and they earn less than $37,000 per year), any contributions that you make to their super can provide you with a tax rebate of up to $540. You can also claim any contributions that you may have made directly from your bank account to your super until you reach the contributions limit (known as a cap).
Discussing with a specialist or your super provider about the best course of action for you and your needs may be the step you need to take to ensure the potential growth of your fund.
