Boost Your Super – 9 Hacks That Actually Work!

Consolidate Accounts To Boost Your Super

If you have multiple super accounts, you should move all of the money into just one super account – a process known as consolidating.

This allows you to save on the fees you pay, reduces your paperwork, and allows you to better track the performance of your super fund.

Before you move this money from multiple accounts into one fund that already has most of the money in it, you should confirm that this is the fund that is best for you.

You should check the fees, the performance, and the insurance you may have through that account. This leads us to the next point…

Optimise Your Superfund

You should optimise your fund concerning fees, performance and insurance.

Fees

Choosing a fund with low fees will actually increase the money that you will have in your account balance at the end when you retire. This is because the money doesn’t get eaten away by high fees – makes sense, right?

Performance

When optimising your fund for performance, you should choose a fund that has an excellent performance over the last 3-5 years. Super is a long term investment, and you need one that has maintained a good performance over this extended time.

There is no guarantee that this year’s best performing super fund will be the best one next year too, so it’s important to keep this in mind.

Insurance

You should check that you are covered for what you need. Almost every superfund automatically comes with death, disability and income protection insurance.

The actual product between the superfunds may be quite different, so you need to make sure you are covered for your specific requirements and ensure that the premium you have to pay isn’t too expensive – otherwise, this will also eat away the money in your super fund.

Find Lost Super

This is super easy and quick to do online through your MyGov account; simply log in and follow the prompts. It is worth doing this if you have changed your name, address, job, or if you lived overseas.

Did you know that there are billions of unclaimed super? Some of it could be yours; there’s only one way to find out!

These are the three ways on how you can boost your super without putting more money in your account. Now, we’ll go over how you can boost your super with various types of additional contributions.

Boost Your Super With Salary Sacrifice

This is the most widely known additional contribution that you can make. You define a certain amount that is pre-deducted from your pre-tax salary by your employer and sent in with your employer contributions to your super account.

This may initially sound like you are losing money, right? This is, in fact, the opposite. This salary sacrificing amount is only taxed at 15% just like all contributions instead of at your marginal tax rate, which may be quite higher than this rate.

So, instead of losing money, you are actually paying less tax and have more money contributed to your super fund.

There are 2 things you need to know about this method:

1. There is a cap in place – independent of your age, you can only contribute a total of $25,000 to your super fund. This includes your employer contributions, the super guarantee and your personal contributions.
2. If you haven’t maximised this cap in the previous 5 years, and the account balance of your super fund is lower than $500,000, you can use the “5-year carry forward rule“. For example, if we assume that last your you have only put in $15,000 in your super fund, and there is $10,000 left, that means you can put in $35,000 this year.

Tax-Deductible Contributions

These are the contributions you make from your taxed income. In other words, you make a transfer from your personal bank account into your super account.

The advantage of this method is that these contributions are tax-deductible, but there is, of course, a cap in place of $100,000 per year and it has a 3-year carry forward rule if you haven’t maxed out this cap in the previous 3 years.

However, this rule is cancelled if your account balance exceeds $1.6 million. This applies to everything – you cannot have more than $1.6 million in your super fund.

Personal/Co-Contributions

Personal or so-called “co-contributions” apply to low-income earners. If your annual income is below $37,697, the government contributes up to $500 if you make your own contribution of $1000.

If your salary is between this limit of $37,697 and $52,697, your maximum entitlement decreases progressively as your income increases.

Spouse Contributions

If your spouse or de facto partner is not working or is a low-income earner, you can make a super contribution on their behalf, and you can claim an 18% tax offset.

This tax offset reduces if your spouse’s income is greater than $37,000 a year and completely phases out when it reaches $40,000 a year.

Downsizer Contributions

These downsizer contributions apply to people aged 65 years or older who have lived in their house for more than 10 years and are now selling it to downsize into a smaller home.

You can contribute up to $300,000 per person into the super fund, and this is in addition to any other contributions you have made – the caps do not apply in this case. However, you need to make the contribution within 90 days of settlement.

Low-Income Tax Offset

The low-income tax offset is a nice method if you are a low-income earner. If your annual salary is below $37,000 and you make super contributions, the government may pay you back the tax you paid on those contributions.

The maximum offset you can get is $445, and it reduces by 1.5 cents for each dollar that you earn over $37,000. There is a similar tax offset available for middle-income earners, but we won’t go into details here because it can be quite technical!

Just remember that if you are eligible, it will happen automatically, so you don’t have to do anything to get it, but we think it’s a good idea to at least know about it.

So these are the 9 tips we wanted to share on how to boost your super! Why don’t you consolidate your accounts or look for lost super? Most of these tips don’t take much time at all and can be done right away.

If you find any lost super or have found a useful tip here, let us know in the comments below, we would love to know!

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