Supercharge Your Retirement: Strategies for Boosting Your Super Balance 

May 23rd 2024 | Categories: Retirement |

While traditional employer contributions provide a foundation to your super balance, leveraging additional strategies play an important role in ensuring you can achieve your dream retirement. This guide will explore some simple tips and tricks to take advantage of your superannuation potential.  

Salary Sacrifice & Personal Contributions: Salary sacrifice contributions can be a good starting point in boosting your super. By arranging with your employer to divert a portion of your pre-tax salary into your super fund, you increase your retirement savings and enjoy the tax benefits. These contributions are taxed at a concessional rate of 15%, typically lower than an individual’s marginal tax rate, leading to tax savings while bolstering your super balance. Alternatively, if you have some excess savings at tax time, you can always make an after-tax personal contribution and claim the tax deduction. This option gives you more flexibility, but a salary sacrifice is a better option to ensure disciplined contributions.  

TIP: Review your budget and use a salary sacrifice calculator to work how much you can comfortably contribute each pay cycle.

Catch-Up Contributions & Bring Forward Rule: For individuals nearing retirement age who may have fallen behind on their superannuation savings, catch-up contributions offer a valuable opportunity to bridge the gap. This provision enables eligible individuals to contribute unused portions of their concessional contribution caps from previous years, significantly boosting their retirement savings. Introduced by the Australian government, the catch-up contributions scheme allows individuals with total super balances below $500,000, as of 1 July in the current financial year, to make additional concessional contributions beyond the standard annual cap. If you are nearing the edge of this balance, you may wish to take advantage of this rule now before the contribution cut-off. 

Additionally, the bring-forward rule allows individuals under the age of 75 to make up to three years’ worth of non-concessional (after-tax) contributions in a single financial year. This rule is amazing for getting a large sum into super at once if you come into a lump sum of money due.  

Government Co-Contributions: The government co-contribution scheme presents an excellent opportunity for low to middle-income earners to boost their superannuation savings. Eligible individuals who make personal after-tax contributions to their super fund may receive a matching contribution from the government. By taking advantage of this scheme, individuals can effectively amplify their retirement savings while minimising their tax liabilities, thus enhancing their long-term financial security. There are limits to this top-up, so you should consult with a financial adviser for more information.  

Review Insurance Cover and Investment Options: Regularly reviewing your superannuation fund’s insurance cover and investment options is essential for optimising your retirement savings strategy. Assess whether your current insurance coverage aligns with your needs and circumstances and consider adjusting it accordingly. Similarly, evaluate your investment options to ensure they align with your risk tolerance, time horizon, and retirement goals. Diversifying your investments across different asset classes can help mitigate asset class risk and enhance long-term returns.  

Maximising your superannuation is key to living your best possible life during retirement, and these tips and tricks are just a handful of common tools. As always, there are regulations surrounding superannuation allowances. It is best to book an appointment with a financial adviser to discuss your options and determine if there are any other strategies suitable for your financial situation.  

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What you need to know: This information is provided by Invest Blue Pty Ltd (ABN 91 100 874 744). The information contained in this article is of general nature only and does not take into account the objectives, financial situation or needs of any particular person. Therefore, before making any decision, you should consider the appropriateness of the advice with regards to those matters and seek personal financial, tax and/or legal advice prior to acting on this information. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relation to products and services provided to you.