Now you’ve started whipping your super into shape and getting a better understanding how your contributions are being invested, it’s time to work out what else you can do to ensure you have a great retirement.
The key to a comfortable retirement is regularly putting the right amount away so it can grow throughout your working life. Although your employer is doing a lot of the heavy lifting, you also need to do your bit.
Once you’ve completed this checklist, you’ll understand more about the opportunities there are to add to your retirement nest-egg and whether or not any of these are right for you.
You may not be able to do everything in one go, but make sure you check off each section after you complete it so you know you’re making real progress.
Strategies to boost your super savings
Get your employer to help
- Consider setting up a salary-sacrifice arrangement with your employer to put more money into super from your before-tax income.
By making regular contributions from your before-tax wages or salary, you not only boost your super account balance, but you also reduce the income on which you are taxed.
Learn more about how salary sacrifice works.
Use your salary before the taxman gets it
- Think about making additional concessional (before-tax) contributions if you haven’t used all your annual caps in recent years.
You can check if you have any unused concessional contribution limits if your myGov account is linked to the ATO online service.
Learn more about carry-forward contributions.
- Compare carry-forward and bring-forward contributions (see section 7 for more about bring-forward arrangements).
Save some tax by making a super contribution
- Consider making a personal super contribution from your after-tax income so you can claim a deduction when tax time comes around.
A contribution like this can be a simple way to boost your super and get a tax deduction to sweeten the deal if you have money to spare. Once only available to the self-employed, now most Aussies can make these contributions.
Learn more about tax-deductible contributions.
Earn some free money from the government
- Take advantage of the government’s co-contribution scheme by tipping some extra dollars into your super account and let the government add up to $500 to your account.
Learn more about the government super co-contribution.
Get your partner in on the act
- Consider contributing to your partner’s super account. This can provide a handy boost to your combined retirement savings pool.
An extra bonus with this strategy is you will earn yourself a tax offset of up to $540 you can claim against your tax bill.
Learn how to boost your spouse’s super.
- Review whether it makes sense to even up account balances if you and your spouse have very different amounts in super. If your spouse has a lot less in their account, consider splitting your concessional (before-tax) super contributions and transferring some of them to their account.
Learn about splitting super contributions.
Make a personal super contribution
- Check your budget and decide whether you can spare a few extra dollars a week to make regular contributions from your take-home pay.
Learn about personal non-concessional contributions.
- Consider making a one-off contribution into your super account if you’ve made a profit from selling some shares or an investment property, or have received an inheritance.
Learn about the pros and cons of contributing an inheritance.
- Think about a bring-forward arrangement to use up to three years’ worth of your non-concessional contribution caps. These allow you to make a larger contribution into your account if you have the money available.
Learn about bring-forward arrangements.
Sell your home and contribute to your super
- Consider making a downsizer contribution if you’re over age 60 (from 1 July 2022) and plan to sell your home in the near future.
Couples can contribute up to $600,00 into their super account if they’re eligible ($300,000 per person) and the contribution isn’t counted towards your annual non concessional contributions cap.
Learn more about downsizer contributions.
Consider a recontribution strategy
- Check out whether a recontribution strategy could work for you if you’re nearing retirement.
There can be valuable tax benefits in making a withdrawal from your super account and then putting the money back into super. This strategy is not for everyone, but it can be useful in some situations.
Learn more about recontribution strategies.
Work out your best mix of super contributions
- Using the information you gathered in Checklist 4 about your current contributions and annual contributions caps, make a list of your potential opportunities to make contributions during this financial year.
- Use ASIC’s MoneySmart Super Contributions Optimiser tool to work out the best way to grow your retirement nest egg. This online tool is designed to help you work out which mix of super contributions will give your super the biggest boost.
- Ensure you play around with the Contributions Optimiser and try some different options to see the impact on your retirement savings.
The next task is to learn about Accessing Your Super. When you’re ready to take the plunge, click on the button below.