Your employer may already be contributing to your super account. But making additional contributions can be a quick and effective way to top up your super. Even small yet consistent extra contributions could make a difference down the track. Here are a couple of options for making additional contributions to your super:
Salary sacrifice
You may be able to use your pre-tax salary to make additional contributions to your super fund.
Devan is 45 and recently had a pay rise of $5,000 – taking his total salary to $100,000 per year. He’s planning on retiring in 20 years, so he decides to use his $5,000 pay rise to make a pre-tax contribution to his super. By adding $5,000 to super, it will be taxed at 15% ($750) rather than his marginal tax rate of 32%¹ ($1,600). This means that he will contribute an extra $850 to his super, for a total of $4,250.
Voluntary contributions
Adding to your super account by contributing a little more from your take-home pay can be a great way of growing your savings.
Jamie is 50 years old and has $50,000 of savings which she would like to invest for her retirement. If Jamie contributes this money into super, any earnings will be taxed at only 15% in her super fund rather than a maximum of 47% (including Medicare levy) with other types of investments. By paying less tax Jamie could save more money toward her retirement goals.
Ready to add to your super?
Alternatively, explore these contribution strategies further plus more ways to grow your super.
There is limit on the amount of contributions you can make each year to your super without paying extra tax.