We all live longer these days and the default super our employers are paying won’t be enough to meet our needs in retirement. That’s why it is always a good idea to put a little extra into your super fund.
Main benefits of growing your super as much as possible are:
- Cost of living is increasing
- We are living longer and the age pension is not enough for retirement life
- Tax concession on the personal contributions
- You may be eligible for government co-contribution of up to $500 a year
- Use the Superannuation Calculator in the Learning Centre page to find out how much difference you can make to your retirement, by putting a little money every month.
Who Can Make Contributions?
There are certain rules for making contributions, basically it depends on your age as summarised in below table:
|Your Age||Who can contribute|
|Under 65||You, your spouse1, your employer and a third party|
|At least 65 but under 75||You and your employer provided you meet the ‘work test’2. If you do not meet the
‘work test’2 your employer can still make mandated employer contributions.3 This may change subject to the proposed 2016-17 Budget changes being passed by Parliament including changes to eligibility for spouse contributions between age 65-74 years old.
|Over 75||Your employer can make mandated employer contributions3 including Superannuation Guarantee payments.
Note: You and your employer can make other types of contributions provided you meet the ‘work test’2 and the contribution is received on or before the 28th day following the end of the month in which you turn 75.
1. Your spouse includes a person (same or different sex) who, although not legally married to you, lives with you on a genuine domestic basis in a relationship as a couple. It generally does not include a person who lives separately and apart from you on a permanent basis.
2. The ‘work test’ means you have been ‘gainfully employed’ for at least 40 hours during any period of 30 consecutive days in that financial year where ‘gainfully employed’ means you have been employed or self-employed for gain or reward in any business, trade, profession, vocation, calling, occupation or employment.
3. A ‘mandated employer contribution’ is one which:
- Reduces an employer’s potential liability for the Superannuation Guarantee charge;
- Is a payment of a shortfall component; or
- Is a contribution to satisfy the employer’s obligation under an agreement certified, or an award made, on or after 1 July 1986 by an industrial authority.
Here are some ways to boost your Super over time
1. Salary Sacrifice before-tax money into Super
Speak to your employer about making salary sacrifice contributions into your super. You will only pay 15% tax, generally this is lower than tax paid on your take-home pay (average between 34% to 46.5%).
Because salary sacrifice is classified as a concessional contribution, annual limits apply as shown below table:
|Financial year||Aged 49 years or over on 30 June 2016|
2. Make after-tax contributions and take advantage of government co-contribution
You can also make a contribution from your savings (after-tax money), depends on your income, you could receive the bonus government co-contribution up to $500 a year (providing your income is less than $49,488 p.a.). Go to Super co-contribution section on ATO website for more information.
3. Enjoy an extra tax offset by making a spouse contributions
A tax offset of up to $540 may be available, if you make an after-tax contribution on behalf of your spouse. The tax offset phrases out where your spouse’s assessable income exceeds $10,800. Go to Spouse the Super contribution tax offset section on ATO website for more information.
4. Save money on fees by consolidating all your super into Smartsave Members Choice
If you have changed jobs in the past, the chances are you will have multiple super accounts. Combining them into Smartsave Members Choice means, not only you save on multiple sets of administration fees, you will also have less paperwork to do, to help you to top of your retirement planning.
Simply complete the Transfer Form and we will look after the rest.
Or, if you are confused or unsure where all of your super is located, we can help you find your super and combine them into your existing Smartsave Members Choice.