Summary
Making your super last
Australians are living longer than ever. In fact, you could be retired for more than 20 years. That means your super needs to last longer, too.
One way to boost your balance is by making additional contributions if you can1.
Ways you could boost your super balance in the lead-up to retirement:
- Add to your super before tax through salary sacrifice.
- Add to your super after tax from your take-home pay.
- Your partner adding to your super.
Our easy-to-use Super Projection calculator can help you:
- Work out how much your contributions may benefit your super balance.
- Discover the most effective way to contribute to your super based on current information.
- Work towards a retirement goal.
3 simple ways to save more super before you retire
Making extra contributions can help boost your super balance and potentially save on tax - if you are in a position to do so. Your super balance stays invested so any investment returns you receive benefit from compounding returns too. Picture this: A snowball rolling down a hill; it may start small, but it grows the longer it rolls. That’s because it’s adding layer after layer. The snowball represents your balance, and the layers represent the compound returns over the long term.
Making extra voluntary contributions to your super account can have a big impact on your final super balance and your retirement lifestyle. Explore these 3 simple ways you can add more to your super1.
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1. Add to your super before tax through salary sacrifice
You could make before-tax super contributions (known as concessional contributions) on top of your employer's payments. This is called salary sacrificing which means your employer pays a portion of your salary directly into your super account rather than into your bank account2.
2. Add to your super after tax from your take-home pay
Making an after-tax super contribution (known as a non-concessional contribution) is something you can do at any time1 (subject to your age and contributions limits). It’s where you pay money directly into your super account from your bank account.
As an AustralianSuper member, you can contribute to your super account quickly and easily via the AustralianSuper mobile app or your account online.
3. Your partner can add to your super
Your partner can help grow your super in 2 ways, before or after tax.
Spouse contributions (after tax):
Make non-concessional contributions to your super account, provided you’re eligible and under the age of 75. Your spouse can do this by using the BPAY details from your super account online or by completing a form.
Plus, if you earn less than $40,000 a year, your spouse could claim a tax offset.
Contribution splitting (before tax):
One partner can split up to 85% of their concessional contributions, including salary sacrifice, employer and any after-tax contributions claimed as a tax deduction from the previous financial year. Eligibility and other conditions apply. If your partner is an AustralianSuper member download the form.
For more information about contribution splitting visit ato.gov.au
Grow your super in retirement
You've worked and saved hard to build a super nest egg for your retirement. Now that you’re starting to think about the next stage of your life, it’s important to think about how you want to manage your money. You could be retired for more than 20 years, so choosing an option which could help grow your savings is something to consider - and could help your super last throughout your retirement.
Planning your retirement means taking stock of your super and deciding how to manage your finances. For many people, super plays a key part in funding their retirement years.
There are many options to manage your retirement savings. Here are 4 options to help manage yours.
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1. Leave your money in your super account until you need it
Many people start using their super savings as soon as they retire and can access their super, but you don’t have to. If you have other income sources or savings to live on, you could leave your savings in your super account.
Super has concessional tax treatment. This means your super fund pays up to (or a maximum) of 15% tax on earnings, before investment returns are paid. This means your money stays invested if you don’t need regular income and could continue to benefit from investment returns, which are net of tax.
To learn more visit moneysmart.gov.au
2. Take your balance as a lump sum
You may choose to take your super out as a lump sum and manage it yourself. This can be done by withdrawing your super (tax free if you're 60 or over) and putting it into a bank account. Once that’s done you could manage your money, by:
- using a savings account, or
- investing your money outside super.
Earnings are assessable by the Australian Tax Office via your tax return annually. For details visit australiansuper.com/tax
3. Start a Transition to Retirement strategy
Making a transition to retirement – rather than completely stopping work – gives you the flexibility to get ready for retirement based on your needs.
An AustralianSuper Transition to Retirement (TTR) Income account helps if you want to work fewer hours by balancing out your reduced salary with payments from your super3. Or you can use a TTR Income account to reduce the amount of tax you pay on income by making additional concessional contributions to your super2.
4. Open an account-based pension
An account based pension keeps you in control of your super balance in retirement by receiving a regular income payment – just like when you were working4. If you're 60 or over, your income payment is tax free.
Our account based pension is called Choice Income. If you have a Choice Income account, the AustralianSuper investment team invests your super, and is focused on delivering strong, long-term returns that are tax-free.
Account based pensions have better concessional tax treatment, as investment earnings are tax-free. You benefit from all the return, unlike super which pays up to 15% tax on earnings, before investment returns are paid.
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Disclaimers
- Before adding to your super, consider your financial circumstances, eligibility, contribution caps that may apply, tax issues and when your super can be accessed. We recommend you consider seeking financial advice.
- Salary sacrifice may affect some Government benefits and employee benefits. We recommend you consider seeking financial advice before deciding if a salary sacrifice arrangement is right for you.
- Transition to Retirement (TTR) can be complex and isn’t suited to everyone. It’s a good idea to get financial advice before deciding if a TTR Income account is right for you.
- Conditions apply, such as government lifetime limit on the amount of super you can transfer into any tax-free retirement account(s), called the 'Transfer balance cap'. Age based minimum income drawdown amounts. Minimum opening balance. You can't make contributions to a pension account (only to a super account)