Superannuation is a crucial part of planning for retirement. Whether you work for a company or are self-employed, it's never too late to start building up your super and maximising your retirement savings. Here are six practical steps you can take to help you achieve the retirement you want:
1. Ensure your employer is paying the correct amount of super
It’s essential to check your employer is paying you the right amount of super - on time and in full. For employees, this means making sure they are paying the minimum superannuation guarantee (SG) rate of 11% of your ordinary time earnings (OTE) or more if you have agreed with them. Please note that this is scheduled to progressively increase to 12% on 1 July 2025. If you think something is amiss, check with the Australian Taxation Office (ATO).
2. Make extra voluntary contributions if you can afford it
You can make extra contributions over and above what is required from employers by salary sacrificing or making personal after-tax contributions. Be aware that there may be limits on how much extra contributions you can make in a year before you incur additional tax liabilities; the concessional (ie pre-tax) threshold is $27,500, meaning you'd need to be on a salary of $250,000 or more before limits become an issue. This SMSF Association article highlights the new contributions threshold effective 1 July 2024.
3. Find out if you're eligible for government co-contributions
If you’re eligible, the government will match any after-tax contributions made into your super account up to certain limits each financial year, so it may be worth looking into whether this applies to you when considering additional voluntary contributions.
4. Check your super investment options
As part of managing your superannuation effectively, it pays to review and update your investment strategy regularly according to changes in economic conditions as well as life events such as marriage or having children so that it aligns with your goals and risk profile. Speak with a qualified financial advisor about which investments are best suited for meeting those goals and objectives given your individual situation. The Financial Advisor Association can help you find advisors near you.
5. Pay yourself super if you’re self-employed
If self-employed, remember that since no one else is paying money into your super fund on your behalf, then it’s up to you! Consider setting aside some money each quarter - even small amounts add up over time - so that when retirement comes around, there will be enough saved up for comfortable living expenses as well as other things like travel and leisure activities.
6. Shop your way into a super future
You can earn extra money towards your retirement just by completing your everyday shopping on the Grow My Money platform. You can shop online or in-store, and every purchase earns you cash back into your Grow My Money account. It’s as simple as downloading the Grow My Money cashback app and doing your shopping in one place. Grow My Money is free to join and has 1500+ brands and retailers to choose from.
Managing our own finances can sometimes feel overwhelming. However, taking control of our future now can pay off later, allowing us to enjoy our golden years. Invest the time in understanding how superannuation works to ensure that you have enough money set aside for our later years in retirement. Sign up to Grow My Money today and get started making extra contributions.
This blog contains general advice only and does not take account of an individual’s objectives, financial situation or needs. Before acting on this general advice, individuals need to consider its appropriateness having regard to their objectives, financial situation or needs and should seek their own independent advice.