The new financial year is the perfect time to start speeding up your super savings.
Adding extra to your super now can make life so much more comfortable once you stop working - whether it’s $20 a week pre-tax via salary sacrifice, or an after-tax lump sum due to downsizing, selling shares or earning commissions.
Salary sacrifice and save on tax
Starting regular super contributions via salary sacrifice means that these pre-income tax contributions only get taxed at 15%, rather than at your personal tax rate (up to 45%). This means more money for you, not the taxman.
Earn interest on interest and watch your balance grow
Over your working life, the interest that your super earns each year earns interest as well. So you get interest on your contributions, plus interest on your interest!
Obviously the longer you contribute, the more benefit you get - but it’s never too late to start.
Catch up on contributions
If you have a total super balance of less than $500,000 from the previous financial year, you can carry-forward any unused concessional caps on a rolling 5-year basis.
This means if you don’t contribute the maximum annual allowable amount into your super, you can increase your contributions in following years by those unused amounts (for a maximum of five years, after which they will expire) by using the carry-forward rule.
This rule applies from 1 July 2018. This means that the 2020 financial year is the first year in which you can top-up your super contributions by the carry forward amount.
Annual concessional contribution caps (or limits):
| Financial year | Contribution cap |
| 2018 - 2019 | $25,000 |
| 2019 - 2020 | $25,000 |
| 2020 - 2021 | $25,000 |
| 2021 - 2022 onwards | $27,500 |
There’s more than one way to top up your super
It’s time to get savvy and familiarise yourself with the multitude of ways you can grow your super.
Start thinking outside the box, did your partner get a pay rise or bonus this year, do the grandparents always give you cash on your birthday…remember every single dollar in your super account is earning you interest, plus your interest is earning you interest!
If you are putting some extra money into your super, the government might chip in too!
Get on board and start creating a better retirement for you.
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The information contained in this article does not constitute financial product advice. REI Super does not give any warranty to the accuracy, completeness or currency of the information provided. Although REI Super makes every reasonable effort to maintain current and accurate information, you should be aware that there is still the possibility of inadvertent errors and technical inaccuracies. REI Superannuation Fund Pty Ltd ABN 68 056 044 770, AFSL 240569, RSE L0000314 Trustee of REI Super (ABN 76 641 658 449), SPIN REI0001AU, RSE R1000412. MySuper unique identifier 76641658449129. May 2022.