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Six ways to build your superMany people rely on their employer’s contributions to build their super. But there are many other ways to increase your savings, here are six tips to help retire comfortably.You may be surprised by what you can do with your super. While the different taxes, laws and types of contributions may be confusing, you can start taking control and even boost your super savings by understanding the basics.

1. Super guaranteeWith a few exceptions, your employer must contribute 9.5 per cent of your pre-tax salary to your super. This is known as the ‘super guarantee’ and is taxed at 15 per cent.1 Most people build their super purely through employer contributions but there are other ways to accumulate super.

2. Salary sacrificeAsk your employer to increase the contribution. This is called ‘salary sacrifice’ because you make voluntary contributions to your super by sacrificing part of your pre-tax salary. This contribution is also taxed at 15 per cent.2 The pre-tax limit on contributions for anyone under the age of 50 is $30,000 per year, and $35,000 per year for those over 50.3

1 ASIC, Money Smart, (n.d.), How Super Works. Accessed at www.moneysmart.gov.au/superannuation-and-retirement/how-super-works2 Industry SuperFunds, (n.d.), Tax and Super. Accessed at www.industrysuper.com/understand-super/tax-and-super/3 Power, Trish, (July, 2015), The short story on super contributions limits (2015/2016). Accessed at www.superguide.com.au/boost-your-superannuation/the-short-story-on-super-contribution-limits-2

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3. After tax contributionsMake voluntary contributions to your super from your after-tax income. These contributions won’t be taxed again as you’ve already paid tax on the money at your normal rate. The after-tax contribution limit is $180,000 per year.4 But bring forward provisions could allow contributions up to $540,000.If you are a high-income earner, salary sacrifice may be more tax-effective than voluntary after-tax payments as your income may be taxed at the highest marginal tax rate of up to 47 per cent (plus Medicare levy).5

4. Low income super contribution schemeIf you are a low-income earner, you could benefit from the low income super contribution scheme where the government will refund the 15 per cent tax up to $500.6 Take advantage now as this scheme will end in 2017.7

5. Co-contributionsTake advantage of government concessions such as the co-contribution scheme. If you make voluntary after-tax contributions you could receive a contribution from the government, depending on your income.8

6. Spouse contributionsIf your spouse is on a low income, contribute to their super. This will reduce your income tax and you may even be entitled to a tax offset. You could also split your employer super contributions with your spouse.9

There are many other strategies to boost retirement savings and achieve tax-effective outcomes, including transition to retirement plans. A financial adviser could help you build your super today for a more comfortable future.

*Authorised Representative of Millennium3 Financial Services Pty Ltd ABN 61 094 529 987 AFSL 244252The information provided in this document is general information only and does not constitute personal advice. It has been prepared without taking into account any of your individual objectives, financial solutions or needs. Before acting on this information you should consider its appropriateness, having regard to your own objectives, financial situation and needs. You should read the relevant Product Disclosure Statements and seek personal advice from a qualified financial adviser. Millennium3 Financial Services Pty Ltd ABN 61 094 529 987 AFSL 244252. From time to time we may send you informative updates and details of the range of services we can provide. If you no longer want to receive this information please contact our office to opt out.

4 Ibid.5 ANZ, (n.d.), Boost your super savings before the end of the financial year. ANZ Source Document.6 Power, Trish, (September, 2016), Super for beginners: Top 10 must-know facts. Accessed at www.superguide.com.au/boost-your-superannuation/super-for-beginners-top-10-must-know-facts7 Industry SuperFunds, (n.d), Changes to Super. Accessed at www.industrysuper.com/understand-super/super-changes/8 ASIC, Money Smart, (n.d.), How Super Works. Accessed at www.moneysmart.gov.au/superannuation-and-retirement/how-super-works9 ANZ, (n.d.), Boost your super savings before the end of the financial year. ANZ Source Document.

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