Superannuation is a long-term financial relationship. It begins with our first job, grows during our working life and hopefully supports us through our old age.
We have outlined below a few steps to help you maximise your superannuation.
The first step is to check how much money you have in super and whether you have accounts you’ve forgotten about. You can search for lost super and consolidate all your money into one fund if you have multiple accounts by registering with the ATO’s online services. Having a single fund will avoid paying multiple sets of fees and insurance premiums.
The next step is to check what return you are earning on your money, how it is invested and how much you are paying in fees.
Also check whether you have insurance in your super. A recent report by the Australian Securities and Investments Commission (ASIC) found that almost one quarter of fund members don’t know they have insurance cover, potentially missing out on payouts they are entitled to.
You can build your super in several ways:
Pre-tax contributions of up to $25,000 a year (including SG amounts), either from a salary sacrifice arrangement with your employer or as a personal tax-deductible contribution. This is likely to be of benefit if your marginal tax rate is higher than the super tax rate of 15 per cent.
After-tax contributions from your take-home pay. If you are a low-income earner the government may match 50c in every dollar you add to super up to a maximum of $500 a year.
If you are 65 and considering downsizing your home, you may be able to contribute up to $300,000 of the proceeds into your super.
Before you make additional contributions, adjust your insurance, or alter your investment strategy, it’s important to assess your overall financial situation, objectives and needs.