Retirement can feel like a long way off, but investing extra money into your super is one way you can help set yourself up for a comfortable retirement. One of the great benefits of super is that earnings are taxed at a low rate. So, unlike other types of investments, any earnings you make on your super will be taxed at a maximum of 15% instead of your marginal tax rate. For example, if you invest your money in the share market, your earnings could be taxed at a rate of up to 47% (including Medicare levy), depending on your income. But any investment earnings in super are only taxed at a maximum of 15% (catch being, you can’t access this until you reach preservation age).
How to boost your super
There are two main ways to make extra contributions and give your super a boost.
Super tip: If you haven't used all of your before-tax contributions cap by the end of the financial year, you can boost your super with an after-tax contribution and claim it as a tax deduction. This will convert it into a before-tax contribution and may reduce the amount of tax you need to pay, depending on your personal situation. If you do this, please send us a completed Notice of intent to claim or vary a deduction for personal super contributions (PDF) form when making your payment.
Helpful information before you get started
Things to consider
Before topping up your super you should consider what’s best for you. The MoneySmart Super Contribution Optimiser helps you work out what type of contribution will give your super the biggest boost.
Contributions may be subject to limits, or contribution caps, and criteria set by the government.
- If you’re over the age of 67 but under 75 years of age and wish to claim a tax deduction on your contributions, you’ll need to meet the ‘work test’. Check out the Australian Taxation Office website for more information.
If you're unsure, don't forget we're here to help. You can give us a call on 13 64 63 or email firstname.lastname@example.org. If your needs are more complex, we can put you in touch with a financial adviser from Mine Super Financial Advice.
1 Calculation made using Super Guru calculator and based on a 35-year-old person putting an additional $10 each week into their super account as an after-tax contribution, assuming 4.80% pa growth over 32 years (and retiring at age 67). Calculation as at 28 March 2022.
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