Super tips and strategies if you are in your 30s or 40s

If you can make extra contributions from your pre-tax salary into your super account, you not only increase you super balance, you could also reduce your annual tax bill, as concessional (before-tax) contributions are taxed at the lower rate of 15%.

2. Review your insurance cover

Now is definitely the time to check the insurance cover that comes with your super to ensure it’s appropriate for your personal financial situation. If you have a big mortgage or a growing family, it’s important to check you have sufficient insurance cover to look after the people that depend on you if you die or cannot work for a long period.

By paying the premiums for death, total and permanent disability (TPD) and income protection cover from the money in your super account, it can be a cost-effective way to get insurance protection if your family budget is stretched.

3. Check your benefit nomination

Most super funds encourage you to make a death benefit nomination that guides your super fund’s trustee on how you would like your death benefit to be distributed if you die.

Most super funds allow you to make a binding nomination, but these need to be refreshed every three years or they lapse. If this happens, the trustee of your super fund will be the one deciding who receives your super death benefit.

4. Boost your other half’s super account

During these two decades a growing family takes priority and your spouse may need to take time off to care for new members of the family.

There can be valuable tax benefits in making contributions into your spouse’s super account, or splitting your contributions and placing some into your spouse’s account.

5. Review your investment option

As your personal circumstances change and you build assets outside super, it’s sensible to regularly review the investment option in which your super savings is invested.

Although you are still many years from retirement and can afford to ride out investment market volatility, it may be worth reviewing how your total portfolio (which includes the money and assets you own outside super), is invested to ensure it remains appropriate.

6. Set a super savings goal

Spend some time thinking about how much you would like to have in your super account when you retire. If you have a clear goal, you are much more likely to achieve it.

Once you have set a goal, you can work out if you need to make additional voluntary contributions to achieve it, or if you super savings are invested in the correct investment option to accumulate sufficient money for retirement.

7. Consider personal tax-deductible or carry-forward super contributions

If you make a voluntary contribution into your super account, you may be able to claim a tax deduction for it and pay less tax on your income. This type of contribution can also make a valuable addition to the balance of your super account in the run up to retirement.

You – or your partner – could also consider making a carry-forward contribution if either of you are not using the full amount of your annual concessional contributions cap. Unused cap amounts can be carried forward for up to five years and could allow you to make a larger concessional contribution in a particular year.

8. Take advantage of free government money

Depending on your income, you could be eligible for a government co?contribution into your super account of up to $500 a year when you make personal contributions to your super fund.

There is also free money on offer if you are eligible for the Low Income Superannuation Tax Offset (LISTO), which was previously called the Low Income Superannuation Contribution. If you’re eligible and earn up to $37,000, this is a payment of up to $500 from the federal government directly into your super account.

9. Consider starting a self-managed super fund (SMSF)

For some people in their 30s and 40s, it can be worth establishing your own SMSF if you are interested in taking more control of your retirement savings. SMSFs allow you to tailor your investment strategy and can be a useful tool if you plan to buy your own business premises. However, it’s important to remember SMSFs must adhere to lots of rules and you will have the ATO looking over your shoulder.

10. Check your employer’s SG contributions

Your employer must be making SG contributions at least quarterly, so it’s important to check with your super fund (or the ATO’s online services through your myGov account) that employer contributions are being paid regularly into your account.

Given the tough conditions facing many businesses in the wake of COVID-19, it may be tempting for your employer not to prioritise paying your super contributions. If you have checked on your SG contributions and the business fails, you are less likely to lose your super contributions as well as your job.

Having up-to-date employer contributions (including salary sacrifice contributions) is also important if you plan to make extra personal super contributions before financial year-end. Otherwise you could accidentally go over your contribution caps.