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 super before tax through salary sacrifice
- Add to super after tax from your take-home pay
- Your partner adding to super
Our easy-to-use Super Projection calculator can help by:
- working out if you’ll have enough income for your retirement needs
- estimate how long your super could last
- see the difference adding to your super now could make to your retirement in the long run.
3 simple ways to save more super before you retire
In the lead-up to retirement, you can continue to boost your super balance.
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 also 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 3 simple ways you can add more to your super1 .
-
1. Add to your super before tax through salary sacrifice
You can make before-tax super 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 from the AustralianSuper mobile app.
3. Contribution Splitting
You can also contribute to your partner’s super by splitting up to 85% of your before-tax super contributions. Before-tax contributions include employer contributions, salary sacrifice contributions you make and any after-tax contributions you make that you claim a tax deduction for. If you’re making after-tax contributions to your partner’s super, your partner needs to be under age 75, to be eligible to receive spouse contributions.
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 several options to manage your retirement savings. Here are four options to help manage yours.
-
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. This means your money stays invested if you don’t need the income and could continue to benefit from investment returns.
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 and putting it into a bank account. Once that’s done you could manage your money. including by:
- using a savings account
- investing your money outside super
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 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 allowing you to take your super as a regular income payment – just like when you were working4.
Ours is called Choice Income. It keeps your money invested by your super fund. If you have a Choice Income account, the AustralianSuper investment team invests your super, with the aim of delivering you strong, long-term returns.
Even in retirement a long-term focus is important as you may be retired for over 20 years. In most cases, making successful investment decisions requires financial expertise and a strong knowledge of how to manage risk.
Tags:
-
Important Information
- Before adding to your super, consider your financial circumstances, contribution caps that may apply, and tax issues. Salary sacrifice may affect some Government benefits and employee benefits. Consider getting financial advice before deciding what’s right for you.
- Salary sacrifice may affect some Government benefits and employee benefits. Consider getting 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)