Week 2 March 2019 - Super Smart (and Super Serious)
Getting money into super
This week we’re looking at some of the ways you can get money into your superannuation account.
There are three main ways to build your super savings:
Concessional contributions include employer Superannuation Guarantee (SG) contributions, salary sacrifice contributions, and your personal contributions for which you claim a tax deduction. There’s currently a $25,000 annual cap on concessional contributions, although in some case you can “catch up” if you haven’t used up your cap from previous years.
Non-concessional contributions are those made with after-tax money. There’s currently a $100,000 annual cap on these types of contributions, but it can be possible to use the “bring-forward” rules to make a larger contribution.
If you’re a lower income earner, you may be eligible for the:
Low Income Superannuation Tax Offset (LITSO) - the government may refund the contributions tax deducted from your super account, equal to 15% of the total concessional super contributions capped at $500
Government co-contributions - an amount of up to $500 if you earn less than a set threshold in a financial year and make after-tax contributions to your super
If you have a spouse, it may be possible to make spouse contributions and receive the spouse superannuation tax offset.
Your task this week: check your superannuation statement(s) to see what contributions and/or rollovers have been made into your super account, and also check that you are getting all of the contributions you’re entitled to.
If you’re in paid work, it’s really important to make sure that your employer is paying you the right amount of SG contributions. You can use this calculator to check whether you’re eligible, and then check your pay slip and compare it to your super account to make sure you have the right amount going into your fund. Employers are meant to pay superannuation into accounts at least quarterly.
You can also use this calculator on the MoneySmart website to see how all of the different types of contributions can help build your retirement savings.
This is important: please don’t make any changes to your super funds until you have ALL of the information you need, and that may also mean getting professional advice.
Please remember that all of the information provided in the Lunchtime Money Club is factual information and is not intended to be general or personal advice.