ANZ Superannuation The Value of Advice Super Speak Contact us
Topping up your super

Topping up your super Australian employers are required generally to contribute at least 9% of your salary to super but this may not be enough for you to live the lifestyle you want in retirement. So topping up your super could make great sense, because it can make a huge difference to your retirement.

The government wants to encourage people to save for their retirement, so super has been given some tax advantages compared to other types of investments.

Here are some ways to get more bang for your buck with the super system.

Salary Sacrifice

Salary sacrifice works by nominating more of your gross (before tax) income as a super contribution. It means that your take home salary will be reduced, but where you might pay as much as 45 per cent income tax, these type of super contributions are only taxed at up to 15 per cent - meaning you could be better off.

In short, a salary sacrifice strategy could mean that overall you could pay less tax, whilst giving your super savings a significant boost. Take a look at this case study (PDF, 302kb) for an example.

Remember there are limits to how much before tax income you can contribute to super (also known as concessional contributions) and receive this tax treatment – read more about contribution limits (PDF, 262kb) for all the details.

Tip: It is time to look at your mortgage. Depending on your circumstances, you may be better off putting the money in super and paying off your mortgage balance at retirement. Talk to an ANZ Financial Planner.

 
Other ways to top up

Salary sacrifice isn't the only way to boost your super. If you have some extra money to invest, maybe a bonus, tax refund, inheritance or money left over from selling the family home, your super may be the best place to put this after tax money. Such personal after tax contributions are also known as non-concessional contributions under the new super system.

You won't pay 15 per cent tax when you put the money into super, and any investment earnings in the fund are taxed at no more than 15%. Once you turn age 60, all cash withdrawals from any taxed super fund are also tax free. These concessions could make a difference to the final value of your investments compared to other fully taxable options.

Tip: If your spouse earns less than $13,800, you can contribute to their super and claim a tax offset on the contributions (up to a maximum of $540). And, if you are earning less than $58,980 a year, you may be eligible for some additional super 'co-contributions' from the government for any personal after tax contributions you make.

 
Small changes can make a huge difference to your retirement benefits but there is a lot to consider before making these type of investment decisions, such as capital gains and other taxes, so it can really pay to get advice on how to maximise your super savings.