For some, spending more for their superannuation in Australia may be the least of their priorities. There are many other things one would prefer to prioritise over their super, such as settling mortgage debt or saving up for a family holiday. Nonetheless, a flourishing super fund is in fact a significant investment that may positively impact your financial future, especially come retirement.
However, data from the Australian Bureau of Statistics (ABS) for superannuation in Australia sadly indicates that presently, women are retiring with nearly 40% less super than men. It can be a distressing thought for most women as they generally live five years longer than men.
Regardless of what stage you are in life right now, 2019 is the year to start re-evaluating your super payments so that you can achieve your retirement goals. Here are some tips to consider on how to maximise your super this year.
1. Invest more in your super
Ignoring super contributions is easy, mainly because mandatory contributions are taken out of an employee’s salary. Unfortunately, not tracking super payments may result in insufficient wealth come retirement, specifically for part-time workers.
So, what you can do is examine your finances, and see if you can allocate a little more of your money into your super. If that is a possibility, notify your super fund and your workplace so you can take advantage of concessional contributions. However, make sure not to exceed the $25,000 annual cap.
Investing more into your super will not only result in significant benefits come tax time, but it will also increase the growth of your finances in retirement.
2. Simplify your super
Working with multiple super accounts can be challenging and costly. It can be hard to keep track of the amount of money you’ve invested and where. As a matter of fact, around six million Australians have actually lost super accounts, which has totalled to over $14 billion of lost super investments.
Make this year the year to simplify your super so you can save money on fees and get back on track to reaching your retirement aspirations.
3. Stay informed on policy changes
Superannuation policies are always changing. The 2018 budget has experienced a variety of adjustments.
One of the changes to super is the drop of the concessional contributions cap to $25,000 per year no matter the age. For individuals who are over 50 years old, it used to be $35,000. The after-tax contributions cap used to be $180,000 a year but is now at $100,000. In addition, after-tax contributions cannot be made if the total super balance is over $1.6 million.
4. Anticipate super losses
Today, Australian women in general are retiring with around 40% less super than men, especially women with kids. Taking care of kids, maternity leaves and lower salaries suggest that they may find themselves incapable of saving more money for their retirement.
If you are worried about the numbers in your super account, consider planning ahead for future situations where you might see the possibility of falling short on your super payments.
Planning to take maternity leave in the near future? Talk with your employer about making super payments throughout your paid leave. Or, you might consider making tax-deductible contributions from your savings, or perhaps discussing with your partner about spouse contributions. Planning ahead, and sticking to a good strategy will always ensure your success.
Need reliable advice regarding your superannuation in Australia? Contact your nearest Chan & Naylor Wealth Planning Specialist here today.
Aside from superannuation assistance, have a look at our other accounting and advisory services that we do to help you achieve greater financial success.
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