Just 1 less meal a month in a restaurant or 1 less takeaway meal could see you save $35*. Add that money to your super fund, and by the time you’re ready to leave the workforce at age 65, you could have an extra $38,796* in super. Home cooking never tasted so good, right?
One of the ways to boost super is through a salary sacrifice arrangement.
This is where you choose to sacrifice a portion of your pre-tax salary to be contributed into your super instead of receiving cash in hand.
Salary sacrificing super contributions can be an excellent way to boost your super and build a healthy long-term investment. As well as boosting your super, you could also end up paying less tax as these contributions are taxed at a maximum rate of 15% rather than your marginal tax rate, as long as you are not a ‘high income earner’^. Depending on your marginal tax rate, this may be a tax effective way of saving for your retirement.
Salary sacrifice may also be the right choice for people who want to add to their retirement savings and can afford a reduction in their take home pay. You can speak to a financial advisor to find out more about whether a salary scarifies arrangement is right for you.
Work out how much of each pay you can afford to tuck into super. Your household budget can help here but remember, even small extra contributions can make a big difference over time. You can speak to a financial advisor to find out more about whether a salary scarifies arrangement is right for you.
Talk to your employer to organise a salary sacrifice arrangement. Bear in mind, annual limits apply to these concessional super contributions^ and some employers may not accept salary sacrifice arrangements. To find out more about annual limits visit ato.gov.au or speak to a financial advisor.
Sit back, relax and enjoy today knowing you are taking an important step to prepare for a better future.
BT Super expert, Melinda Howes, discusses how you can boost your super.
*Calculation made using superguru.com.au calculator (http://www.superguru.com.au/ExternalFiles/calculators/small-change/index.html) and based on a 30-year-old person putting an additional $35 each month into their super account, assuming 5%pa growth over 35 years. The figures provided by the calculator are based on a series of assumptions and are general illustrations only. The calculator is not intended to be relied on to make a decision about a financial product and you should consider obtaining advice from a financial adviser before you make any financial decisions. To the extent permitted by law, no entity in BT will be liable to you or any other party for any loss or damage arising, directly or indirectly, from the calculator, and does not make any representation or warranty about the accuracy of the results.
Important information and disclaimer
The above information provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such. The information does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. Any 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.
^Superannuation is a long-term investment. The Government has placed restrictions on when you can access your preserved benefits. The Government has set caps on the amount of money you can add to superannuation each year on a concessionally taxed basis. In addition, the Government has set a non-concessional contributions cap. For more detail, speak with a financial adviser or visit the ATO website. Before requesting the rollover, you should also check with your other fund(s) to see if there are any exit fees for moving your benefit, or other loss of benefits (e.g. insurance cover). There may be limited circumstances where your employer is not required to accept your Choice of Superannuation fund form eg. if you have already exercised Super Choice in the last 12 months. Past performance is not a reliable indicator of future performance.
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