Superannuation is one of the most essential tools you have for securing a comfortable retirement.
While most people are familiar with the basics—like making contributions and choosing investment options—some hidden gems within the superannuation system can really make a difference.
Whether you’re just starting out or on your way to retirement, here are some lesser-known superannuation secrets that could help you get the most out of your nest egg.
1. Boost Your Partner’s Super—And Get a Tax Break Too!
Did you know that you can boost your partner’s superannuation by making contributions on their behalf? This is especially helpful if your spouse earns a lower income or takes time off work, like during parental leave.
For instance, let’s say your spouse earns less than $37,000 a year. By contributing $3,000 to their super fund, you could receive a tax offset of up to $540. Not only does this help grow your partner’s super, but it also gives you a nice little tax break. It’s a simple way to support each other and ensure you have a healthy retirement fund.
2. Insurance Inside Super—Convenient, But With a Few Things to Consider
Most people don’t realise that their superannuation fund typically includes some form of insurance, such as life insurance, total and permanent disability (TPD) insurance, and income protection. It’s a convenient way to ensure you’re covered, but there are a few things to keep in mind.
For example, while the premiums are automatically paid from your super balance, making it easier on your wallet, these payments can slowly chip away at your super savings. Plus, the default coverage might not be enough for your needs, especially if you’ve got a growing family or specific financial commitments. It’s worth checking in on your insurance coverage to make sure it’s the right fit for you and adjusting if needed.
3. Accessing Your Super Early—A Lifeline in Tough Times
While super is generally locked away until you reach retirement age, there are certain situations where you can access it early. This can be a real lifeline during tough times, but many people aren’t aware of these options.
Imagine you’re facing severe financial hardship, such as falling behind on your mortgage. If you’ve been receiving government income support payments for at least 26 weeks and can’t meet your living expenses, you might be able to access some of your super to help out.
Or, if you’re dealing with a terminal illness, you can access your super tax-free, providing crucial support when you need it most.
4. Lost Super—There Could Be Hidden Money Waiting for You
Believe it or not, billions of dollars in superannuation are sitting unclaimed in lost super accounts. This happens when people change jobs, move, or forget to update their super fund details, leading to multiple accounts or unclaimed super.
Take a moment to check for any lost super through the MyGov website. You might be surprised to find accounts you’ve forgotten about.
By consolidating these into your main super fund, you can save on fees and give your retirement balance a nice little boost. It’s like finding hidden treasure, and every little bit counts toward a more comfortable retirement.
5. Salary Sacrificing—A Smart, Tax-Efficient Way to Grow Your Super
Salary sacrificing is a strategy whereby a portion of your pre-tax income is paid directly into your superannuation account. It’s a simple and tax-efficient way to grow your retirement savings, yet not everyone fully understands how powerful it can be.
Here’s an example: If you’re earning $100,000 a year and decide to salary sacrifice $10,000 into your super, you’ll pay just 15% tax on that $10,000 instead of your usual marginal tax rate. That’s a great way to save on taxes while boosting your super balance.
Just remember to keep an eye on the contribution caps to avoid any extra tax penalties.
Wrapping It Up
Superannuation is more than just a retirement savings account—it’s a powerful tool with features many people don’t fully appreciate.
From making contributions for your spouse to discovering lost super and using tax-efficient strategies like salary sacrificing these lesser-known aspects can make a difference in your financial future.
Taking the time to explore these options and making informed decisions now can help you maximise your superannuation benefits and secure a more comfortable retirement.
Whether you’re just starting out or well on your way to retirement, knowing these superannuation secrets can give you a valuable edge and peace of mind for the years to come.
