Retirement planning: super considerations to make before you stop work
30 September 2021Section Heading
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To retire isn’t a simple case of working one day and not working the next. Retiring significantly impacts every aspect of your life. Because of this, there are many considerations to make, especially how it affects your financial position as you will no longer have a regular salary.
If you’re considering retiring in the near future, you need a solid retirement plan. Part of this retirement plan should be the super you’ve accumulated over the years. Super can help you transition comfortably from working to not working so you can enjoy your post-work life to the fullest.
Read on for some super considerations you should make long before you retire.
Keep boosting your super as part of your retirement plan
If you feel that you’re getting closer to retirement, giving your super a top-up on a consistent basis could be a part of your retirement plan.
The super environment has always been a tax-effective one. But an advantage with boosting your super earlier in your working life is that you’re allowing the power of time to help you compound your returns for longer.
This means that as you get closer to retirement, you may have accumulated more super than you would have without topping up your super On a regular basis
There are multiple ways to do this
Salary Sacrifice
A salary sacrifice is an agreement you make with your employer to make super contributions from your before-tax salary. By salary sacrificing, you’re lowering your income tax and putting more into super, all at the same time.
If you’re a Triple S member, you have no annual concessional contribution limits. This means you can salary sacrifice as much as you like within any financial year. Please note a lifetime concessional cap of $1.6mxxxxx applies. Learn more.
Make voluntary after-tax contributions
This is where you make a contribution to your super out of your take-home pay. Because you’ve already paid the tax on it, you won’t need to pay any more contributions tax.
If you happen to be earning less than $54,837 a year, you may also receive a Government Co-Contribution of $0.50 for every $1.00 contributed, up to $500 per year.
And if you’re earning less than $37,000 a year, you could get $500 refunded from before-tax contributions (made by an employer or via salary sacrifice).
