When it comes to retirement, the number most often tossed around is $1 million—but is that really what you need? The truth is, your ideal superannuation balance depends on far more than a headline figure. It’s about how you want to live, what support you might need along the way, and the lifestyle you’re working toward. Whether you’re nearing retirement or just starting to think about the next phase of life, there are practical, tax-effective strategies to help you grow your super and retire with confidence.
Your individual goals and circumstances will determine the size of your retirement nest egg. But there are a number of practical strategies you can use to boost your super before retirement:
- Delaying retirement: For the 2024-25 financial year, employers must contribute 11.5% of your salary to your super account. This is known as the superannuation guarantee (SG) contribution. Postponing retirement, working a little longer, or continuing to work at reduced hours can help with financial security by receiving further employer contributions to your superannuation.
- Consider salary sacrificing: Salary sacrificing can be an effective strategy to boost your superannuation savings. It allows you to arrange with your employer to make additional before-tax contributions to your super account, which are taxed at a flat rate of 15%. These contributions are included in the concessional (before-tax) contribution cap, which is currently set at $30,000 per annum and provides employer contributions such as superannuation guarantee contributions and personal contributions for which you claim a tax deduction.
- Make after-tax contributions: After-tax contributions can be an effective way to boost your super. These contributions are from your after-tax income and are included in the non-concessional (after-tax) contributions cap. The current cap is $120,000 per annum. You may be able to bring forward up to three years of after-tax contributions, depending on your total super balance and age.
- Spouse contributions: If your spouse is a low-income earner (earning up to $40,000 per year), you can make super contributions and claim a tax offset of up to $540 annually. This tax offset is calculated as 18% of the contributions made. To be eligible, you must be married or in a de facto relationship with your partner, and both of you must be Australian residents.
- Government co-contribution: If you earn less than $60,400 per year and make after-tax super contributions, you may be eligible for a government co-contribution of up to $500 per year. This co-contribution is paid directly into your super account after you’ve lodged your tax return for the year.
Using these strategies can help you maximise your super and retire comfortably.
However, as a general starting point, you can use the Money Smart calculator to work out:
- How long your account-based pension will last
- How investment returns will affect your pension balance.
Planning for retirement doesn’t have to be overwhelming—but it does need to be personal. The best way to ensure your strategy is working for your goals is to have a conversation with someone who understands the full picture. Our financial planners are here to help you explore your options, make the most of every contribution, and map out a retirement that gives you peace of mind. Ready to take the next step? Let’s talk about what your future could look like.
Source: Perpetual
