Superannuation Strategy in 2021

Superannuation Strategy in 2021

A Superannuation strategy should be on your 2021 checklist. There are lots of ways you can improve you super situation, check them out below. 

1. Salary Sacrifice

Salary Sacrificing is when you contribute pre-tax dollars from your salary into your superannuation account. On top of your employer’s legal contribution of 9.5% of your salary, you are able to contribute additional amounts to top up to an annual cap of $25,000  (concessional) each year. After tax, you can contribute a total of up to $100,000.

2. Co-contribution to your superannuation

You may be eligible for a government co-contribution (maximum of $500) if you are a low-to-middle income earner who has made a personal (after-tax) contribution. 

3. Tax Breaks

You may have benefited from concessional contributions on a lower tax rate. Non-concessional contributions have already been taxed. Both receive concessional tax treatment on earnings inside super.

4. What super fund do you have?

Do you know if your superannuation fund is working for you? Are you in a default fund or have you specified a goal to your superannuation fund provider? Talk to a professional if necessary to understand your choice of superannuation fund and discuss if there may be one better suited to your future goals.  The right fund can translate into additional hundreds of thousands of dollars in retirement savings, and it is important to understand this as early as possible. 

5. Make extra super contributions to pay for your super

Finally, while some people may hold their insurance payments within their super to help with cash flow, the payments may reduce the amount available in retirement, and in some cases make the insurance proceeds difficult to access. You need to get advice on whether life/tpd and income protection and other personal insurance is best inside or outside superannuation,  based on your circumstances. 

All the best with your Superannuation Strategy in 2021.