During the pandemic, many Australians were eligible to withdraw up to $20,000 from their super to help them through tough times. However, recent analysis from the Super Members Council suggests that this $38 billion withdrawal could have a significant economic cost in the future and impact retirement super balances more than expected.
If you’ve had to dip into your super before retirement, there are strategies you can implement to help get your retirement savings back on track without compromising your current standard of living. Here are 5 quick tips to boost your super savings:
1. Consider salary sacrificing pre-tax salary: This involves diverting some of your pre-tax salary to super through an arrangement with your employer. Even small incremental amounts can add up over time, allowing compounding returns to work in your favor.
2. Qualify for a Government super top-up: If you earn less than $58,446 per year and make personal after-tax contributions to your super, you may be eligible for an additional super top-up from the Government known as the co-contribution.
3. Contribute for a spouse and pick up a tax offset: Making after-tax contributions to your spouse’s super account can provide you with a tax offset if your spouse earns less than $40,000 per year.
4. Make a contribution and pick up a tax deduction: Making personal after-tax contributions to super and claiming a tax deduction for them can help you receive a tax refund and boost your retirement savings.
5. Make up for lost time with a catch-up contribution: If you haven’t fully utilized your annual CC cap since July 2018, you may have accrued unused CCs that allow you to make larger contributions in the future.
By implementing these strategies, you can rebuild your super account balance and secure a more comfortable retirement.