A new year and a new look at your super
It’s a new year and time to take a look at your finances and super.
Super continues to be one of the most tax-effective long-term savings vehicles in Australia so the more you can put in now, the better off you will be later in life.
Here are three ways to build your super.
Replace what you may have withdrawn
Did you withdraw money from your super through the Federal Government’s COVID-19 early release of super program?
Are you now in a position to put this money back into your super?
If so, then the Australian Taxation Office (ATO) has put in a place a tax effective way of allowing you make personal contributions to replace the amount you withdrew from your super account.
Generally, there are limits on how much you can contribute to the tax effective super environment. However, the ATO has determined that, if the amount you repay back into your super might exceed your non-concessional contributions cap (or limit), this amount can be treated as 're-contributions', and excluded from the cap to retain favourable tax treatment.
Visit the ATO web page for more information.
A little more now means faster growth
Look at your finances. Are you able to contribute a little more to your super now?
The more you contribute now, the faster your super account can grow, due to compound interest.
Your employer already makes Superannuation Guarantee contributions to your super. You can boost your super though additional before-tax or after-tax contributions:
- Before-tax salary sacrifice contributions – ask your employer to pay more from your before-tax salary into your super account
- After-tax personal contributions/ after tax voluntary contributions – you can make one off, or regular after-tax contributions to your super
Sort your super - combine it into one account
It makes sense to have your super all in the one place. Combining your super into one account could save time and money as you pay only one set of fees. It is also easier to keep track of one account.
Before you consolidate your super accounts, check your insurance and any other benefits you might lose. When you consolidate your super, you’ll lose any insurance cover from the funds you’ve left so review your insurance to make sure it covers your needs.