Superannuation (super) is one of the most crucial aspects of your financial planning for retirement in Australia. However, many people find that their superannuation savings fall short of what they need for a comfortable retirement. The good news is that there are several ways you can boost your superannuation and make the most of this vital long-term savings tool. Whether you’re just starting out in your career or nearing retirement, it’s never too early (or too late) to take action to increase your super.
Why Increasing Your Superannuation Matters
The Australian government requires employers to pay a percentage of your income into a superannuation fund, known as the Superannuation Guarantee (SG). As of 2025, the SG rate will rise to 12%. However, this contribution may not be enough to fund your desired lifestyle in retirement. The more you can contribute to your super and the earlier you start, the better your chances of achieving financial security once you stop working.
Here are some strategies to increase your superannuation and grow your retirement savings:
- Make Voluntary Contributions
There are two primary ways to make additional contributions to your superannuation:
- Concessional Contributions (Before-tax Contributions):
These contributions are made before tax is applied, reducing your taxable income and providing potential tax benefits. Concessional contributions include your employer’s SG payments, salary sacrifice arrangements, and personal contributions for which you claim a tax deduction. In the 2024-25 financial year, the concessional contribution cap is $30,000 per year (including employer SG payments). - Non-Concessional Contributions (After-tax Contributions):
These are voluntary contributions made after tax has been paid on your income. You won’t get a tax deduction for these contributions, but the upside is that they aren’t taxed when they’re added to your super. The non-concessional contribution cap is $120,000 per year (or up to $360,000 over three years if you’re under 67).
- Salary Sacrifice
Salary sacrificing is one of the most popular ways to increase your superannuation. With salary sacrificing, you agree to have part of your pre-tax salary paid directly into your superannuation fund. This reduces your taxable income, potentially lowering your overall tax liability while boosting your retirement savings. The contributions are taxed at 15%, which is often lower than your marginal tax rate, making it a tax-effective way to save for the future.
- Consolidate Your Superannuation Funds
Many Australians have multiple superannuation accounts, which can lead to paying multiple sets of fees and underperforming investments. Consolidating your super accounts into one fund can reduce fees and simplify your financial management. Before consolidating, ensure that you check for any exit fees and that your super fund offers the best possible investment options for your retirement goals.
- Review Your Investment Strategy
The way your super is invested plays a key role in growing your retirement savings. Superannuation funds typically offer a range of investment options, from conservative to high-growth portfolios. If you’re young and have a long time before retirement, you may want to take a more aggressive approach with a higher allocation to growth assets like shares. If you’re closer to retirement, you may want to adopt a more conservative strategy to protect your savings.
It’s essential to regularly review your investment strategy to ensure that it aligns with your risk tolerance, investment time horizon, and retirement goals. Super funds typically provide annual reports on how their investment options are performing, so take the time to review this information and adjust your investments accordingly.
- Take Advantage of Government Co-Contributions
If you are a low or middle-income earner, the government may help boost your super contributions through a co-contribution scheme. If you make a personal after-tax contribution to your super fund, the government will match a portion of that contribution, up to a certain limit, based on your income.
For example, if you earn less than $45,400 per year, the government may contribute up to $500 in matching co-contributions for every $1,000 you contribute to your super. The co-contribution amount gradually decreases as your income increases and phases out completely for individuals earning over $60,400 per year.
- Make Spouse Contributions
If your spouse earns a low income (under $40,000), you can contribute to their superannuation on their behalf. This can help boost their retirement savings while potentially earning you a tax offset. For the 2024-25 financial year, you could receive a tax offset of up to $540 for making spouse contributions, provided your spouse meets the eligibility criteria.
- Consider a One-Off Lump Sum Contribution
If you receive a financial windfall, such as a tax refund, a bonus, or an inheritance, consider making a lump sum contribution to your super. This can give your super balance a significant boost in a single transaction. Keep in mind the annual contribution caps when making a lump sum contribution to avoid excess contributions tax.
- Delay Your Retirement
If you are approaching retirement but are still a few years away, delaying your retirement can have a major impact on your superannuation balance. By continuing to work for a few more years, you will keep contributing to your super and allow your savings to grow further. Additionally, delaying retirement means you can potentially benefit from compound growth on your super over a longer period.
Top Tips for Increasing Your Superannuation
- Start Early: The earlier you start contributing to your super, the more time your money has to grow thanks to compound interest. Even small additional contributions can make a big difference over time.
- Make Contributions Regularly: Set up automated contributions to ensure you consistently add to your super, rather than waiting for a large lump sum or an occasional windfall.
- Review Your Super Fund: Compare fees and performance across different super funds to ensure your savings are working hard for you. Choosing a fund with low fees and good investment performance can significantly impact your super balance.
- Take Advantage of Tax Benefits: Use salary sacrifice, government co-contributions, and other tax-effective strategies to maximize your super while minimizing tax.
- Consider Professional Advice: A financial advisor can help you choose the best strategy for your superannuation based on your individual circumstances and retirement goals.
Conclusion
Boosting your superannuation is one of the most effective ways to secure a comfortable retirement. Whether you’re in the early stages of your career or approaching retirement, there are many strategies you can use to grow your superannuation balance. By making additional contributions, consolidating funds, reviewing your investment strategy, and taking advantage of government incentives, you can ensure that you’re on track to achieve your retirement goals. Remember, the earlier you take action, the more time your super has to grow—so start planning today for a brighter financial future tomorrow.
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If you have any questions or would like further information, please feel free to give our office on 08 9221 5522 or via email – info@camdenprofessionals.com.au or arrange a time for a meeting so we can discuss your requirements in more detail.
How can we help?
If you have any questions or would like further information, please feel free to give our office on 08 9221 5522 or via email – info@camdenprofessionals.com.au or arrange a time for a meeting so we can discuss your requirements in more detail.
General Advice Warning
The material on this page and on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this page and on this website is General Advice and does not take into account any person’s particular investment objectives, financial situation and particular needs.
Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this page and on this website are for illustrative purposes only.
Although every effort has been made to verify the accuracy of the information contained on this page and on this website, Camden Professionals, its officers, representatives, employees, and agents disclaim all liability [except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this website or any loss or damage suffered by any person directly or indirectly through relying on this information.
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