Help boost your super growth
With the Government having slowed incremental increases to the compulsory superannuation rate, it’s even more important for members to consider topping up their super themselves.
The Super Guarantee rate was to increase 0.5% per year in the next few years but has been put on hold at 9.5% until June 2021.
According to a report by Deloitte Actuaries & Consultants last June, Australians must accept that even 12% super contributions are not enough. People need to:
- Take more ownership and be more involved in their own retirement planning
- Seek help to make informed decisions regarding how much to contribute.
Using Association of Superannuation Funds of Australia (ASFA) Retirement Standard figures and working some numbers, Deloitte estimates Australians will need this much super at age 65 (2014 dollars):
Are you on track?
Try the retirement calculator under the Resources tab at www.vissf.com.au
You can play around with different variables and see the impact salary sacrifice contributions to your super can make. Acting now could make a very big difference to what you end up with later so put time on your side.
Redirect some salary to super
The word ‘sacrifice’ sounds pretty harsh but a salary sacrifice arrangement into super needn’t be.
Ask your employer if they can redirect some of your before-tax salary directly into your VISSF super account.
The power of this arrangement is:
✔ Super contributions (within the contribution caps) are taxed at only 15% – a lot less than most marginal tax rates – meaning you get more money going into savings rather than tax
✔ Because it’s a routine arrangement, it encourages consistent, disciplined saving.
✔ Any investment earnings are automatically added to your super so you can earn interest on your interest which can add up over time.
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