Control and Secure Retirement
Why contribute more to your super?
Employers are required to contribute 9.5% of your salary to your super but the harsh reality is this may not be enough to allow you to live the lifestyle you want in retirement.
Did you know a couple wanting a comfortable retirement will need approximately $58,326 a year?1 Incorporating income from superannuation and the age pension they would still need to accumulate a super balance at age 65 of around $860,0002. The majority of us are likely to not have enough super which is why it's so important to not just rely on your employer's contributions.
There are several ways to make additional contributions into your fund which could make a big difference to the size of your retirement nest egg.
Start giving up a bit of your salary
Salary sacrificing sounds painful, but it can be one of the easiest things you can do to grow your super. Just ask your employer about the process regarding putting some of your pre-tax super salary into your super account every time you get paid.
It's not hard to do and your contribution would only be taxed at 15% instead of your marginal tax rate, so it would only make a small difference to your take-home pay.
What difference does it make?
Salary sacrificing really can make a big difference. Let's take a look at some examples.
Hamish is 30 years old and earns $68,000 a year before tax. He can afford to salary sacrifice $10 per week. By contributing $10 per week before tax he may receive these benefits:
- Over $100 tax savings per year
- Over $26,000 extra super at age 653.
Best of all, it doesn't impact what he takes home every week in a hugely noticeable way. His take home pay without salary sacrificing is $52,993 and with the above extra contributions $52,652.
Let's look at another example. Camilla is 40 years old and earns $75,000 before tax. She can afford to salary sacrifice $20 per week. By contributing $20 per week before tax she may receive these benefits:
- Over $350 tax savings per year
- Almost 32,000 extra super at age 654
Her take-home pay is also not affected dramatically, with her take home pay without salary sacrificing being $57,578 and with the above extra contributions $56,897.
One last example. John is 55 years old and earns $100,000 before tax, He can afford to salary sacrifice $100 per week. By contributing $100 per week before tax he may receive these benefits:
- $608 tax savings per year
- Around $50,000 extra super at age 655
His take home pay without salary sacrificing is $73,053 and with the above extra contributions $69,881 - so he is also not greatly out of pocket by salary sacrificing.
How much super do you need?
Everyone has a different idea of what life after work looks like - and obviously this affects how much your retirement will cost. A more tailored way of working out how much super you'll need for retirement is by using our Retirement Simulator. This super simple tool can help you work out if your savings are on track and give you options to improve your results.
Watch out for contribution limits
There's a limit to the amount you can contribute to your super each year, before and after tax, depending on your age without incurring additional tax:
- For those aged under 48 it's $30,000 pre-tax, and
- For those over 49 it's $35,000 pre-tax
- After tax, you can contribute $180,000 a year6
Before-tax contributions include salary sacrifice, Superannuation Employer Guarantee and other employer contributions. If you exceed your contributions limit tax penalties may apply.
How to get started
There's a number of ways you can add a little extra to your super:
Before tax contributions: Salary sacrifice
Ask your employer if salary sacrifice is available to you. You usually just have to fill in a quick form, and decide how much of your gross salary you want to put into your super each time you get paid.
It's that easy!
After tax contributions (includes government co-contributions)
You can also make contributions to your super out of your after-tax or take-home pay. Adding to your super from your take-home pay is known as making an after-tax contribution or 'personal contribution'. These can be made on a regular or one-off basis.
Contribute from your bank account, over the phone, or internet. You will need a biller code and reference number.
- Personal biller code 787275
- Spouse biller code 787283
- Personal biller code 787275
- Spouse biller code 787283
- Salary sacrifice biller code 787317
Pop into any Suncorp branch to make a contribution by cheque, cash deposit or transfer from another Suncorp account.
Like to know more
Call us on 13 11 55.
- AFSA Retirement Standard September 2014
- www.moneysmart.gov.au Assumption returns 6.00% pa after rees. Nil earnings tax. Inflation 3.0%
- Source https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/superannuation-calculator - assumes current age 30; salary $68,000; sal sac $10 per week, 7.9% gross return; average tax rate of 7%; 1.0% p.a. management fee; $100 p.a. administrative fee; 2.5% p.a. for rising cost of living; contributions are increased in line with increase in cost and standard of living. Superannuation Guarantee contributions rise from 9.5% to 12.0%; current super balance is $20,000.
- https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/superannuation-calculator - assumes current age 40; salary $75,000; sal sac $20 per week; 7.9% gross return; average tax rate of 7%; 1.0% p.a. management fee; $100 p.a. administrative fee; 2.5% p.a. for rising cost of living; 1.0% p.a. for rising standard of living; contributions are increased in line with increase in cost and standard of living; Superannuation Guarantee contributions rise from 9.5% to 12.0%; current super balance is $20,000.
- https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/superannuation-calculator - assumes current age 55; salary $100,000; sal sac $100 per week; 7.9% gross return; average tax rate of 7%; 1.0% p.a. management fee; $100 p.a. administrative fee; 2.5% p.a. for rising cost of living; 1.0% p.a. for rising standard of living; contributions are increased in line with increase in cost and standard of living; Superannuation Guarantee contributions rise from 9.5% to 12.0%; current super balance is $50,000.
- If you're under 65 you can contribute up to three times this amount in a single year by combining some future years'caps.
This is general information only and doesn’t take into account your personal objectives, financial situation or needs. Before making any decision about whether to acquire or continue to hold any financial product, you should read and consider the Product Disclosure Statements (PDS), Product Guide and Financial Services Guide (FSG) for Suncorp Everyday Super, or the Product Disclosure Statements (PDS) for Suncorp WealthSmart Personal Super adn Suncorp WealthSmart Pension or Suncorp WealthSmart Business Super Suncorp WealthSmart Business Super as well as the Product Guide, and obtain professional advice. Suncorp Everyday Super and Suncorp WealthSmart are part of the Suncorp Master Trust (Fund) (ABN 98 350 952 022, RSE Fund Registration No.R1056655). Suncorp Portfolio Services Limited (Trustee), ABN 61 063 427 958, AFSL 237905, RSE Licence No.L0002059 is a related body corporate of Suncorp Group Limited ABN 66 145 290 124. The products referred to are not bank deposits or other liabilities of Suncorp Bank (Suncorp-Metway Limited ABN 66 010 831 722) (SML) and are subject to investment risk including possible delays in repayment and loss of the interest and principal invested. SML is not liable or responsible for, and does not quarantee or otherwise support, Suncorp Everyday Super or Suncorp WealthSmart accounts. SunperRatings Pty Ltd (ABN 95 100 192 283, AFSL 311800) (SuperRatings) does not issue, sell, quarantee or underwrite Suncorp Everyday Super. Go to www.superratings.com.au for details of its ratings criteria.
Before moving your super you should consider the effect it may have on any insurance cover within your super, and other possible implications such as termination penalties, investment and tax issues.
Suncorp EASE (clearing house), is issued by Suncorp Portfolio Services Limited (SPSL) ABN 61 063 427 958 AFSL 237905 RSE License L0002059. Before deciding whether to acquire or continue to hold Suncorp EASE (clearing house) all persons should obtain, read and consider the relevant Product Disclosure Statement and Product Guide.
Suncorp EASE™ is a free service as long as you contribute to the Suncorp Master Trust, which you have nominated as you default fund under the Choice of Fund regime, for more than 50% of your employees. This rule will be based on the total number of your employees you make contributions for at the time you provide the required contribution information to us.
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