A lot of our clients come to us feeling unsure about their superannuation. They might be wondering if they’re doing enough, or if there are smarter ways to grow their balance without making big lifestyle changes. The good news is that with a few simple strategies, it’s possible to boost your super and take advantage of some generous tax benefits along the way.
Whether you’re just getting started or getting closer to retirement, there are some easy steps you can take today that your future self will thank you for. Let’s explore a few of the most effective (and often overlooked) ways to get the most out of your super.
Here are a few superannuation secrets worth knowing.
1. Make the most of concessional contributions
Concessional contributions are those made from your pre-tax income, such as employer contributions or salary sacrifice. These are taxed at just 15 per cent when they go into your super, which is often much lower than your marginal tax rate. This means you can reduce your taxable income while boosting your retirement savings at the same time.
If your employer allows salary sacrificing, consider setting aside a small regular amount from your pay. Even $50 or $100 a fortnight can grow significantly over time, especially with the power of compound interest.
There is a cap on concessional contributions, so it’s worth checking the current limit and speaking with a financial adviser to stay within the rules.
2. Take advantage of the carry-forward rule
If you haven’t used your full concessional contribution cap in the last five years, you might be able to carry the unused amount forward. This is particularly helpful if you’ve had a few years off work or only recently started earning more.
To be eligible, your total super balance must be under a certain threshold, and you must have unused cap amounts from previous years. It’s a great way to catch up and give your super a boost while keeping your tax bill down.
3. Consider after-tax contributions
Non-concessional (after-tax) contributions can be another smart way to grow your balance, particularly if you’ve received an inheritance, sold an asset, or come into some extra money. While these contributions aren’t taxed going in, there are still limits, and it’s important to be mindful of how they might affect your overall tax position.
Depending on your income, you might also be eligible for a government co-contribution, which is essentially a free top-up to your super when you make personal after-tax contributions.
4. Don’t forget the spouse contribution offset
If your partner earns a low income or is not working, contributing to their super could benefit both of you. You may be eligible for a tax offset of up to $540 when you contribute to your spouse’s fund, helping you reduce your tax while supporting your partner’s retirement savings.
This strategy can be especially helpful for couples where one person has taken time off to care for children or elderly relatives.
5. Review your fund and investment options
Not all super funds are created equal. Fees, performance and investment options can vary widely. It’s worth checking how your fund is performing, what you’re being charged, and whether your investment mix still suits your age, goals and risk tolerance.
Many people set up their super when they first start working and never look at it again. A quick review can sometimes uncover hidden fees or opportunities to switch to a more suitable investment option.
A little time spent now can make a big difference later
Superannuation can be complex, but it doesn’t have to be overwhelming. With the right support and a few smart moves, you can set yourself up for a more comfortable retirement while making the most of the tax advantages that super has to offer.
If you’d like tailored advice or help reviewing your current super strategy, our friendly team at APS is here to help. Get in touch today to start making the most of your super.
Written by APS Senior Financial Advisor, Paul Hatzigeorgiadis.
Paul has over 25 years of experience in the financial services sector. Over Paul’s history, he has provided advice to an extensive range of clients from wealth accumulators to pre and post retirees advising them on Wealth Creation, Cash Flow Management, maximising Centrelink benefits in Retirement, Personal Insurances, Debt minimisation strategies and Superannuation. Paul is married with a 12-year-old daughter and enjoys spending time with family and friends. Whether it’s assisting clients to meet their short-term goals or working with them over a longer term, Paul enjoys helping guide his clients with their financial future.