We all know that our superannuation is there for when we retire, but some people treat their super fund as a “set and forget” bank account and rarely research ways to increase the balance. Over the life of a fund, the contributions that are made from both your employer and of your own accord can greatly impact how comfortably you can live once you decide to retire. Here are some ways to make the most of your superannuation simply by understanding what’s available to you and how to leverage it.
Co-Contribution
The Australian government has developed a scheme to encourage people to make additional payments above and beyond their employer paid contributions into their super. In simple terms, the government will match dollar for dollar each contribution that a person makes into their super fund, but it is capped at a certain amount. If you register early, this government contribution can add literally thousands of dollars to your without having to lift a finger.
Tax Benefits
Super fund contributions only attract a 15% tax. For this reason, many people are choosing to make additional contributions to their super fund because the regular income tax can be anywhere up to 46.50%. Therefore, not only will this increase the balance of your superannuation, but will allow you to keep more of your hard earned money in your name instead of the governments’!
Employer Super Schemes
Some employers will actually encourage you to make extra contributions and reward you by increasing the contribution percentage they are willing to pay up to a certain amount. Companies are looking to superannuation instead of cash bonuses as it will be more beneficial for the employee in the long run.
It really is simple when it comes to figuring out whether it is worth investing in your superannuation – the earlier you start contributing, even with the smallest of amounts, the better you will be set up for retirement. If you start out with 3-5% of you wage going towards your super and gradually increasing that figure as your salary gets higher, you could possibly double the amount you end up with when you retire. Couple that with the tax and government benefits and you’ll be set up for the golden years of life, without a worry in the world!