8 Ways to Boost Your Super Savings

In Australia, superannuation is a crucial investment for all Aussies looking to retire comfortably at the end of their working lives. However, it’s often not until we can see retirement on the horizon that we truly consider superannuation and its impact on our future.  Boosting your super savings nice and early means you’re capitalising on the wonder that is compounding interest and setting yourself up for the best retirement possible. 

What is superannuation? 

Your superannuation – or ‘super’ – is money set aside for you by your employer throughout your working life to fund your retirement. Your super is invested in various assets to help grow your balance and set you up for success when you retire.  While the superannuation guarantee rate (the minimum percentage amount your employer must contribute) can change, it currently stands at 10.5 per cent.

Why is superannuation so important?

Superannuation is a reasonably recent initiative. Due to an increasing life expectancy, the government had to do something to stop the aged pension from overwhelming the economy. Superannuation was developed to target this, meaning there were compulsory savings for the future. Having a stable superannuation balance can be the difference between having your dream retirement and a retirement where you’re struggling financially. 

How can I boost my super savings?

Whether you’re building upon a solid foundation or your current super balance isn’t tracking where you want, here is our superannuation advice on boosting your balance. 

Voluntary contributions 

Voluntary contributions are a great way to build upon your super. These personal contributions are amounts you contribute directly to your super fund but generally are capped at a set amount. These amounts differ from the compulsory employer contributions but don’t include salary sacrifice arrangements.  If you claim a tax deduction on these contributions, they're classed as concessional contributions and are from your pre-tax income. They are taxed in the fund at a rate of 15 per cent. If you don't claim a tax deduction, they're non-concessional contributions from your after-tax income or savings and aren’t further taxed.

Review your super regularly 

While this might not come across as a direct way to maximise your superfund, it’s perhaps one of the most significant things you can do and can make a huge difference over time.  It’s easy now to log in to your super account online - just like you would your bank account - and review a few crucial elements. Some of these aspects include: 

• Check your account balance and investments.
• Make sure your employer is paying you the correct amount regularly.
• Don’t pay more than you need to with insurance and fees.

Unsure whether you’re getting the best deal on your super? Chat with one of our superannuation advisors.

Salary sacrifice 

Salary sacrificing (or salary packaging) is a fantastic incentive to speak with your employer about. Salary sacrifice means exchanging part of your pre-tax salary for other benefits.  With a salary packaging arrangement, you can have some of your salary or wages paid into your super fund instead of to you. This reduces your taxable income, meaning you pay less tax on your income. These concessional contributions are taxed in the super fund at a rate of 15 per cent, which is generally less than your marginal tax rate.

Spousal contributions 

There are a couple of ways to make spousal contributions to your super fund. The first involves splitting contributions you’ve made to your own super by rolling them over to your spouse's super - known as a contributions-splitting super benefit. Secondly, you can make a super contribution directly to your spouse's super, treated as their non-concessional contribution, which may entitle you to a tax offset. You and your spouse will need to meet a few eligibility criteria to qualify for these contributions. You can find out more on the ATO website. 

Downsizer contributions 

If you’re older than 55, you may be eligible to contribute up to $300,000 from the proceeds of the sale (or part sale) of your home into your superannuation fund. Downsizer contributions are non-concessional but don’t count towards the contribution cap.  For more and to find out if you’re eligible, click here. 

Consolidate your super 

If you have multiple superannuation accounts, consolidating them will help you maximise your accounts. Having multiple super funds means you’re unnecessarily paying multiple fees and possibly multiple insurance premiums, too. While it might not seem like much, you could miss out on significant retirement funds if you have multiple super accounts. If you’re unsure how to combine your super funds, reach out to an Inovayt wealth advisor who can assist you further. 

Low-income super tax offset 

The low-income super tax offset (LISTO) is a great way for particular individuals to grow their super fund. If you earn up to $37,000 per year, you may be eligible to receive a LISTO payment of up to $500. The LISTO is 15 per cent of the concessional (before tax) super contributions you or your employer pay into your super fund - up to a maximum of $500. It’s designed to ensure that low-income earners generally don't pay more tax on their super contributions than on their take-home pay.

Government co-contribution

If you're a low or middle-income earner and make personal non-concessional (after-tax) contributions to your super fund, the government may also make a co-contribution of up to $500. The government co-contribution you receive will depend on your income and how much you’ve contributed. During tax time, the government will work out if you’re eligible and automatically deposit the funds into your account. 

How can an Inovayt financial advisor help me boost my superannuation savings? 

Saving for your dream retirement can be as simple as setting up a direct debit and having a small amount come out every week. The power of compounding interest can turn the money you invest into something that meets your financial dreams.  Not sure where to start? Get in touch with an Inovayt financial advisor today.