Retirement planning

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 member of Super SA, you have no annual concessional contribution limits. This means you can salary sacrifice as much as you like within any financial year.

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).

Implement a Transition to Retirement (TTR) strategy

Considering retirement but a bit worried about stopping work and in turn, stopping income from entering your pocket? You may want to consider using a TTR strategy as part of your retirement plan.

If you’re between the ages of 55 and 60 (preservation age), you are allowed to set up a TTR account alongside your currently existing super account. This TTR account allows you access to some of your super while you’re still working.

With a TTR account in place, you can do two things depending on your situation —

• You can supplement your income with TTR if you reduce your work hours.
• Or you can continue working full time while continuing to boost your super and save on tax.

Set up an Income Stream

An income stream is something you can set up as you’re approaching retirement (or if you’ve already retired). It’s definitely worth considering as part of your retirement plan.

If you haven’t fully retired, you can roll part of your super balance into an income stream to receive an income. With an income stream, you can decide how much and how often you receive money. You can also withdraw lump sums when you feel it suits you best.

This is all while your super continues to sit in a tax-effective environment, compounding interest on top of interest. The best part is if you’re over the age of 60, all payments that come out of your income stream are tax free.