Super health check for beginners: 10 tips for your 2016/2017 retirement planning

Note: This article is current for the 2016/2017 financial year.

Near the start of each financial year, SuperGuide publishes an updated super checklist for beginner readers. More advanced checklists will follow in coming months. Use this list as a kick-start for your 2016/2017 super resolutions. You may not keep all of your resolutions, but if you do just a handful of the tasks listed in the checklist below, you can strengthen the chances of a financially secure retirement.

If you do nothing else…

1. Supply TFN to your super fund

Check that your super fund has your tax file number (TFN). If your super fund doesn’t have your TFN, your concessional (before-tax) contributions are hit with penalty tax, and you won’t be permitted to make non-concessional (after-tax) contributions. And as bad things happen in threes, you’ll also be excluded from the co-contribution scheme. For more information, see article Super for beginners, part 14: Save tax – Supply TFN to your super fund.

2. Combine your super accounts

Combining super accounts can save you thousands of dollars in fees, and if you don’t combine them quick-smart, the ATO may snuffle your member accounts under new compulsory transfer laws introduced that were introduced from July 2013, and the super account thresholds were changed again from January 2016, and will be changed again from January 2017. If you’re not sure how many super funds you currently have, then locating these accounts and consolidating your super can add thousands of dollars to your retirement savings in an instant. For information on how to find your super accounts see SuperGuide articles Super in 3 steps: You’re probably richer than you think and Find lost super in 5 steps, and make quick cash.

3. Identify your dependants and non-dependants

Ensure that you have clear plans about what happens to your super benefits and non-super assets in the event of your death. Doing some planning now can save your family a lot of heartache, and possibly save thousands of dollars in tax. Identifying who receives your super benefits when you die (by ensuring you nominate your beneficiaries) becomes more important when you plan to leave your super benefits to a non-dependant for tax purposes, such as a financially independent adult child. For more information on your life expectancy, who can receive your super benefits when you die, and the tax treatment of those benefits, check out the following articles:

4. Aspire to super success in 8 steps

If your tolerance for ‘New Year’ super resolutions, or in this case, Spring super resolutions, has already reached its limit, then the SuperGuide article 8 steps to super success provides a quick overview of what I believe is the bare minimum for anyone hoping for a reasonable superannuation balance on retirement: for example, check fees, investment performance and life insurance.

Now, for some more super-boosting strategies…

5. Do a financial stocktake

The first step is to work out when you plan to retire and what type of income you want to have in retirement. You can then calculate how much money is necessary to finance your preferred retirement income from the age you retire until the day you die (or beyond if you have dependants you want to look after). Work out how much super and other savings you have now and what type of cash you will have if you continue your current savings strategy. If there is a gap between how much you’ll have and how much you want then you have even greater motivation to make the most of the super rules. Alternatively, if you have substantial assets sitting outside the super system you may want to consider shifting some or all of your super assets within the super environment. For more information, check out our special section How much super do I need?, or alternatively, as a starting point, check out the following articles:

Note: The two articles above are updated every six months in line with lifestyle cost increases and Age Pension. The next update for the two articles above will be in October 2016.

6. Consider making concessional (before-tax) contributions

The level of income you earn will generally determine whether you make after-tax or before-tax contributions. If you pay more than 15 cents in the dollar tax, then super starts looking attractive from a tax saving point of view. You may also be interested in making before-tax contributions if you want to offset a large capital gains tax bill.

For information on concessional contributions check out the following SuperGuide article: Super concessional (before-tax) contributions: 2016/2017 survival guide.

Warning: Anyone considering making further super contributions, or anyone on a high income, needs to be mindful of the contributions caps. If you exceed the concessional contributions cap, expect to be hit with penalty tax, or the opportunity to withdraw your excess contributions and be taxed at your marginal tax rate. NOW is the time to check the level of super contributions that you make, or are made on your behalf by your employer, to ensure that you don’t exceed the contributions cap inadvertently. Since 1 July 2012, if your adjusted taxable income is greater than $300,000 a year, your concessional contributions are hit with an extra 15% of tax, which means concessional contributions of very high income-earners are hit with 30% tax.

7. Consider making non-concessional (after-tax) contributions

The annual non-concessional contributions cap is $180,000 for the 2014/2015 year. If you’re under the age of 65, you can bring forward up to two years’ worth of non-concessional contributions. For more information check out the following articles:

Note: If you are a small business owner you may be eligible for a $1.415 million after-tax contribution limit for the 2016/2017 year (indexed), which is a lifetime contribution limit, in addition to the non-concessional contributions cap. The CGT exemption permits personal contributions resulting from the disposal of qualifying small business assets. If you believe that you may be eligible then seek independent advice because the rules that apply to this exemption are complicated.

8. If aged 65 or over, check that you meet the work test before contributing

Anyone under the age of 65 can make super contributions regardless of whether they are working. If an individual is aged 65 or over, then he or she must work 40 hours in a 30-day period during the financial year in which they plan to make the contribution. For more information, check out the following articles:

9. Check eligibility for co-contribution

The co-contribution is a tax-free super contribution from the federal government when you make a non-concessional (after-tax) contribution. For more information check out the following articles:

If you’re willing to spend some money…

10. If necessary, consider talking to an independent adviser

If you’re making major financial decisions, particularly decisions with significant tax implications, then consider seeking independent tax from an accountant or, if you’re planning to embark on major financial strategies involving investments, perhaps a financial adviser. If you do plan to use a financial adviser, then ensure the one you choose understands the super rules and charges a fee for advice. Independent advisers are difficult to find, but not impossible. For more information, check out the following articles:


  1. Hi, I am 57 and would like to retire as with so many that have messages on your site. I don’t have much so to retire and stay on a contract working makes good sense financially. I would be working debt free and would buy an investment property in NZ. But the question remains… Do I pay tax on my super having withdrawn it all?
    Thank you,

  2. With regards to tip 2. Combine your super accounts:
    My spouse & I are trustees of our own SMSF. We are both working full-time with all our super automatically going into our respective employer-sponsored super funds. Thus we are using the employer funds as kind of saving accounts (having selected low-fee investment options). On a regular basis we roll over all but the minimum balance to our SMSF. Thus we retain the life/income insurance benefits associated with the employer funds, & hopefully don’t have much in the way in fees. I was wondering what you and others thought of this strategy.

    Cheers, Paul.

  3. Basic Concepts
    With super & retirement the first thing to realise is that almost all the people you come across will have one common objective – to convince you to part with your money – your cash.
    Next thing, be very careful when researching and collecting info, most of the stuff will actually mislead you!
    Most websites publish content sourced from the retail sector of super or the financial services industry – caution.
    One of the few exceptions is this SuperGuide website.

    Super Industry
    Make sure you are not in the retail sector of super!
    Select a suitable Industry fund, if you sell lollies in a lolly shop your employer will likely put you into REST. If you are not happy then go shopping for another one but stay in the Industry sector.
    Don’t be a quiet member, ask lots of questions and make use of the intra-fund advice facility.
    Stay away from financial planners and only use a reputable accountant.
    With regard to ASIC make sure you understand the difference between “financial advice” and “financial product advice”.
    If you are an older member and fortunate to be is some sort of defined benefit fund – stay there!
    With the above do not allow anyone to fiddle with your super, swap you (commute) to another super product.


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