Super doesn’t have to be complicated. But it certainly pays to be smart.
You could sit back and wait for your super to accumulate over time. Or you can give it a helping hand by making a few small but important decisions now.
Multiple Super
If you’ve got multiple super funds from multiple employers, you’re probably paying multiple sets of fees. You’re probably also receiving multiple statements and annual reports every year.
To make life simple, and to make sure all of your super is heading in the same direction, you should consider consolidating all your super into one.
Having only one super account means:
- you can stop paying multiple sets of fees
- you only have to make one investment decision
- you can have one larger balance to keep track of
If you’d like some help consolidating your super, give us a call.
Salary Sacrifice
Dropping your take-home pay a little can boost your super balance a lot. And save you tax while you’re at it.
How does it work?
You ask your employer to put a portion of your pre-tax salary straight into your super fund.
Because your super contributions are taxed at only 15% by the super fund – as opposed to your marginal tax rate of up to 46.5% (including the Medicare Levy) – more of your money can be invested than if you took this money as cash.
On top of this, the portion of your salary put into super does not count as assessable income, potentially reducing your tax bill even further.
Even small amounts each pay can make a big difference over the long term, so talk to your financial planner to find a salary sacrifice strategy that suits you.
Make Extra After-Tax Contributions
Turn your spare cash into a tax-effective savings plan for retirement.
How does it work?
Putting some of your take-home pay into your super (ie making ‘non-concessional contributions’) can be a tax-efficient way to save – as long as you’re prepared to put it away until retirement.
Because you have already paid income tax on this money, the ATO does not tax you twice.
So unlike salary sacrifice super contributions, which are taxed at 15% by the super fund, non-concessional contributions are received in full into the super environment.
You also pay only 15% tax on earnings on these funds, as opposed to paying your marginal tax rate on the earnings outside super.