How can I grow my super?
Depending on your financial circumstances, the 9% Superannuation Guarantee payments may not be enough for your retirement. If this is the case, there are a number of strategies you can use to really boost your super.
Consolidation
If you've had more than one job in your life, chances are you have may have more than one super account - you may have even lost track of some of them! Consolidating your super is about finding all your super monies and moving them into one account - so you can get clear view of your super and really start to make your money work for your retirement.
The case for consolidation, a difference that's really worth treasuring.
This guide shows you how simple it is to seek out all your super funds and put them into a single fund1. This could add thousands to your super balance at retirement.
Here's a hypothetcial example of how:
- Jenny has one super fund with a balance of $10,000.
- George has 5 super funds, each with $2,000.
- They both pay an annual administration fee of $5 per month for each fund.
- Over 30 years, Jenny's super balance grows to $93, 830 compared to George's balance of just $66,642.
A difference of $27,188 over 30 years, simply because Jenny decided to consolidate1.
1 Example based on net annual returns of 8%p.a. reinvested. No allowances have been made for inflation or taxation. This assumes that the only fees paid by the member are administration fees of $60p.a. and doesn't take into consideration any additional contributions made to any funds.
Government co-contributions
With the Government's super co-contribution scheme, if you are eligible and your total income is less than $31,920 (for 2009/10; indexed in subsequent years), you will receive $1 from the Government for every after-tax dollar you contribute to super up to a maximum of $1,000. The co-contribution amount decreases by 3.333 cents for every dollar earned over $31,920, until it reaches zero at $61,920 (2009/10).
Salary sacrifice
A tax effective way of making additional contributions to your super is through salary sacrificing. Contributions can be made from your pre-tax salary and because they're taxed at just 15% in most cases, it can not only boost your retirement savings but it can also be a useful tax-effective investment strategy. You should consider your concessional contributions cap when undertaking salary sacrifice to super.
Find lost super
There are over 6 million lost super accounts with a total value of approx. $13bn. Some of that $13bn could be your money, and it could be working harder if consolidated with your current account. The Australian Tax Office (ATO) provides a free ‘SuperSeeker’ service to help people locate super accounts they’ve lost track of. If you’ve changed jobs more than once, chances are you’re likely to find some super money through the ATO. To use ‘SuperSeeker’, visit www.ato.gov.au/super or call the ATO on 132 865 and make sure you have your Tax File Number ready.
Learn more about Contributions & Consolidation
For most BT Funds there is no charge for accepting rollovers; however some funds may charge fees for accepting rollovers. Therefore you should check the relevant fund PDS to see whether any rollover fees will apply. You should also check with your other fund/s to determine whether there are any exit fees for moving your benefits, or other loss of benefits (e.g. insurance cover).
The taxation position described is a general statement and should only be used as a guide. It does not constitute tax advice and is based on current tax laws and our interpretation. Your individual situation may differ and you should seek independent professional tax advice.
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