How to make the most of your super savings

Are you nearing retirement, hitting your career peak, or just starting a new role that could lead anywhere? Regardless of where you are in your career, it’s always a good time to make the most of your super savings so you’re set up for retirement.

But just how much super should you retire with? It really depends on the lifestyle you want to live, if you have debts to pay off, or if you have access to any other savings, investments or the Age Pension.

For example, homeowners need up to 70% of their pre-retirement income to live comfortably. That’s because you’re no longer paying taxes or making super contributions so you only have to worry about personal expenses.

If you are working towards 70% as your super benchmark, it’s also worth noting that you need those funds for roughly 30 years, depending on retirement age. So if you think it’s time to boost that super, here’s how you can do it.

Steps to growing your super

1. Check you’re receiving the correct amount

No matter your role, it’s important to check you’re receiving the right amount of super. This is especially important as the super guarantee (SG) rate will increase to 11% from July 1, with two more rises taking it to 12% from July 1, 2025.

You can calculate your SG rate through the Australian Taxation Office (ATO) and if you are receiving less SG than you should, the full contribution will provide a handy boost over the long term. 

2. Make additional payments (after-tax contributions)

There are two major ways to put additional funds into your super account: personal contributions and salary sacrificing. Personal contributions are also known as non-concessional or after-tax contributions and they come from your take-home pay. 

After-tax contributions can be regular or one-off payments that can be claimed as a tax deduction as well. To do so, you will need to submit a Notice of Intent Form with your super fund prior to completing a tax return. It will likely be taxed at the concessional rate of up to 15% rather than the full marginal tax rate of up to 45%.

There are several key points to be aware of:

• You can contribute up to $110,000 each financial year 
• Or you can contribute up to $330,000 in any three-year period up until the age of 75 (excluding downsizer contributions)
• Contributions cannot be made if the total value of your super and income streams is over $1.7 million at the start of the financial year
• Personal contributions can also be made into a spouse’s super account for a tax offset of up to $540 if their income is $37,000 or less
• The Government will also contribute 50 cents for every $1 you contribute if you earn less than $57,016 (Government contribution is capped at $500)
• Up to $300,000 can be put into one super account from the sale of a primary residence and it will not count towards the after-tax cap

3. Salary sacrificing (before-tax contributions)

Salary sacrificing, also known as a before-tax or concessional contribution, is an amount paid directly into your super fund by your employer on top of the 10.5% super guarantee.

As the name suggests, you are sacrificing your take-home pay. So instead of taking home a higher amount of income, you can reduce your PAYG tax by putting more money into your super account. It will be taxed at 15% instead of up to 45% as per the marginal tax rate. 

The main benefit of salary sacrificing over after-tax contributions is that it reduces your income tax and Medicare levy fees. As a result, you can personally save more at tax time while increasing the amount of money you have for retirement. 

In addition, you should know that:

• Salary sacrificing can only be set up through your employer
• You can contribute up to $27,500 per year, including the amount automatically deducted from your super guarantee
• The carry forward rule means if your super balance is less than $500,000 as of June 30 for the previous financial year, any unused cap amounts will roll over throughout a five-year period
• Excess contributions above the cap will be taxed at your marginal rate, minus 15%

4. Choose the best provider

Is your super fund really providing the best return on investment? If you’re not responding with a definitive yes it’s worth comparing super providers. You don’t want to be with an underperforming super fund right up until retirement when a switch 15 years ago could have delivered worthwhile returns.

In addition, consider where your investments are. Perhaps your current fund is providing quality returns but if you’re someone who likes a high-risk investment, you could benefit. 

5. Consolidate your super funds

If you have switched super funds or have joined a new super fund with a new employer, you may have leftover funds elsewhere. The best way to maximise your money is to consolidate your super before retiring. 

You can consolidate super funds through myGov, although there are a few things to consider before doing so. For example, there may be exit fees or additional tax implications when consolidating funds, while the fund with less money could actually be the better-performing option. Speak to a financial advisor if you have a large amount of money in either account. 

For more information on your superannuation, visit the Australian Taxation Office.

The information in this article is general in nature and does not constitute financial advice. If you have any specific questions regarding superannuation, consult a financial advisor or similar.