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Give your super savings a boost

It’s the season for spending big and sometimes your savings can suffer as a result. If you’re concerned your super balance isn’t what it should be, here are three easy ways to get your retirement savings on track in the coming year.

1. Get the right mix of investments

No matter how much you have in your super, how you invest your money makes a difference to your retirement savings and income. You might choose a very low risk investment strategy, but this could mean the value of your savings doesn’t keep pace with inflation. On the other hand, a high-risk strategy could see you lose some of the money you’ve saved.

The ideal is a middle path, where your money is invested for steady gains and enjoys the compounding returns of a carefully selected range of assets. At StatePlus, our financial planners offer strategies for investing in shares and assets that are less volatile. It’s their goal to keep risk low to limit losses and still make reasonable gains when markets are going up.

As the market fluctuates over time, you’ll often find this type of strategy delivers a better overall increase in your investment portfolio. It means your super has a better chance of growing over time, and will continue to benefit from investment returns when you start drawing an income from your super in retirement.

2. Top it up - Salary sacrificing

Paying extra contributions from your pre-tax salary can be a great way to grow your super faster. Even a small amount saved every month will make a difference to your super balance over time. This arrangement is called salary sacrificing and it’s a great way to charge up your super savings and save on tax.

These extra super contributions are taxed at a rate of just 15%. Depending on your marginal rate, you could end up saving on the tax you’re paying. So even though you’re taking money out of your salary payments for your super, you could be adding some back from tax savings.

It’s important to be aware of government limits on any extra super payments you’re making

3. Making extra contributions

Salary sacrificing is just one way to top up your super. Making after tax contributions can make more sense, particularly if you’re eligible for a government co-contribution. When you earn less than $51,021 per year (before tax)1  you can get matching contributions from the government when you make after-tax payments into your super.

It’s important to be aware of government limits on any extra super payments you’re making, There are concessional (before tax) and non-concessional (after tax) caps on your annual contributions and if you exceed these you could end up paying more in tax.

If you’re part of a public sector scheme, there are complex rules about contributing extra to your super. Depending on the type of scheme you have, extra contributions could make a difference to the super benefits and income you’ll get when you retire. Advice from a financial planner who understands the finer details of public sector super can help you make the best choice for your super scheme and financial circumstances.

So what next?

Getting expert advice can make a big difference to how prepared you are for retirement - both emotionally and financially. By discussing your lifestyle goals with a StatePlus financial planner you’ll have a much better understanding of the super and income you’ll need to make retirement a positive change in your life.

To get started, download our free Retirement guide or call us on 1800 620 305.

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1 ASIC Contributing Extra to Super
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Aware Super Pty Ltd ABN 11 118 202 672, AFSL 293340, the trustee of Aware Super ABN 53 226 460 365. Financial planning services are provided by our wholly owned financial planning business Aware Financial Services Australia Limited, ABN 86 003 742 756, AFSL No. 238430.

This information is of a general nature only and is not specific to your personal objectives, personal situation or needs. Before making any decisions based on this information you should consider its appropriateness to you. Every effort has been made to ensure the information is accurate. We strongly recommend that you consult a financial planner before taking action and review the relevant Product Disclosure Statement.

Past performance is not an indicator of future performance and future performance is not guaranteed.

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Salary sacrifice contributions can help to bolster your retirement savings. An Aware Financial financial planner can help to assess what you can afford.

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