The super system is designed to help Australians easily save for retirement during their working lives. But did you know there are still a couple of ways to boost your balance in retirement?
Here are a few ways you could do it:
Downsize your home
Review your investment options
Make voluntary contributions
If you’ve reached your preservation age and want to start tapping into your super while you keep working for a little while longer, you can deposit some of your super savings into an income account as a transition to retirement member.
You can then start receiving regular payments from this account, helping make up the difference in your salary from your reduced work hours. Because you’re still working, your super account will continue to receive employer contributions and any voluntary contributions you make.
If you’re still working after turning 67, your employer will be paying your Superannuation Guarantee contributions, and you might also be eligible to make voluntary contributions to your super.
In order to do so, you have to satisfy something called the ‘work test’: to satisfy the work test from 2020/21 onwards, you must be between 67 and 74 years old, and have worked at least 40 hours within 30 consecutive days in the financial year in which you are making the contributions.
Another rule, called the ‘work test exemption’, allows an individual aged between 67 to 74 to make voluntary contributions for a further 12 months from the end of the financial year in which they last met the work test.
In order to qualify for the exemption, their total super balance must be less than $300,000 and they must not have used the exemption previously.
The usual contributions caps continue to apply.
The concessional contributions cap, for contributions from your pre-tax salary is $27,500 for the 2021/22 financial year, while the non-concessional contributions cap, for contributions from your after-tax salary, is $110,000 a year for the 2021/22 financial year.
Watch this short video to learn how to boost your super: