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FINANCE: How to retire richer

While it’s easy to be discouraged by superannuation and fear you will never have enough money saved to stop working, remember even a modest superannuation balance can make a big difference in retirement. 

For every $100,000 saved in superannuation, you can expect these funds to generate a return of six percent or $6000, a year. 

When this is paid out as a pension, it equates to $500 a month tax-free. 

Of course, this is doubled if both you and your partner have $100,000 each in super. 



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Depending on your overall financial situation, this can be paid in addition to you receiving a full-age pension. 

Here are six super points to help you maximise your super balance:

Consolidate accounts

Consolidate all your superannuation accounts into one account best suited to your needs. 

The Australian Tax Office says some six-million Australians have multiple super accounts, wasting millions of dollars in duplicated charges.

These unnecessary fees will needlessly erode your super balance. 

Consolidating multiple accounts is easy. Simply log on to the ATO’s website and with one click, choose one account to accept all your funds. 

This alone could save you thousands of dollars.

Review contributions

Review your super contributions. 

Check your employer is contributing the right amount to superannuation from your wages each week. 

If you believe there is a shortfall, contact the ATO to investigate on your behalf.

Take advantage

Take advantage of co-contributions. If you earn less than $52,697 a year, consider making additional after-tax super contributions to take advantage of a matching contribution from the government, called a co-contribution. 

Under this scheme, you can contribute up to $1000 of after-tax money and receive a maximum co-contribution of $500. 

This is a 50 percent return on your investment. The government will determine how much you are entitled to when you lodge your tax return, and if you are eligible, then pay the co-contribution directly to your fund.

You don’t need to do anything more than make the original contribution from after-tax savings.

Spouse contributions

Benefit from spouse contributions. Review whether you can benefit from making additional contributions to your partner’s super. 

If you do make contributions to your partner’s super and they are on a low income or not working, you may be able to claim a tax offset of up to $540 a year. 

Long-term savings

Contribute any long-term savings to super. There are rules concerning how much you can contribute to super, and when, but any savings put into superannuation will be held within a tax-benign environment.

While your fund is in accumulation mode, these assets’ income and capital growth are taxed at 15 percent, rather than your marginal tax rate.

Once you start receiving an income stream, these assets are held within a tax-free environment, making your superannuation your own personal tax haven.

Seek guidance

Seek professional guidance. Of course, there are a raft of rules around superannuation of which you must be aware. 

To maximise your retirement nest egg, be sure to seek expert advice from a financial adviser or qualified accountant.

While it is never too early to start making additional contributions to super, it is also never too late. 

Even small steps towards the end of your working life can and will make a difference to the way you live in retirement.

• The information provided in this article is general in nature only and does not constitute personal financial advice.

The entire April 28, 2021 edition of The Weekly Advertiser and AgLife is available online. READ IT HERE!