The ‘what, why and how’ of contributing to super

Why contribute to super?

Despite frequent changes to its governing rules, superanhttps://www.canva.com/photos/MADE9h69SUc/nuation remains, for most people, a tax-effective environment. Super is a long-term investment which utilises time in the market and compound interest to build wealth, which will fund your retirement.

What types of contributions can be made?

• Concessional contributions. These are contributions that are made your pre-tax income. They are taxed at 15% within the super fund opposed to your marginal tax rate. If you earn more than $250,000 pa you will be taxed an additional 15% on the concessional contributions above this threshold.
• Non-concessional contributions. These are contributions made with your after-tax income and have not been claimed as a tax deduction.

Note: Limits apply to the amounts you can contribute.

Adding to super

Making additional contributions is a great way to boost your retirement savings and can help reduce your overall tax for the financial year.

You can calculate your projected superannuation at retirement age with the Money Smart calculator and the effect regular contributions will have on your overall super balance at retirement age.

https://moneysmart.gov.au/how-super-works/superannuation-calculator

Who can contribute to super?

The rules around superannuation are consistently being refined and altered.

Refer to the ATO’s website for guidelines on whether you are eligible to make contributions into your superannuation fund.

https://www.ato.gov.au/Individuals/Super/

Get it right

A successful super contribution strategy can mean the difference between looking forward to retirement and dreading it. Super is a complex area and further rules apply in some situations. Getting things wrong can be costly so talk to your qualified financial planner and get the right advice on the best ways to boost your super.