The Benefits of Making Voluntary Super Contributions

A little goes a long way.

This article is presented in partnership with Aware Super.

Lots of us think of superannuation as that passive piggy bank in the background, collecting money without having to think about it.

But it’s worth giving it some more thought. Your employer’s compulsory contributions alone often aren’t enough to give you the retirement funds you want!

Here are some things to consider.

Make sure it’s the right choice for you.

Before adding to your super with your own money, consider:        

• What are your broader financial goals?
• How much do you realistically need today, and how much can you afford to put away?

But if you can afford to put some away, there are great benefits—even if those amounts start small.

The earlier you start putting money into your super is actually more important than how much.

Even if you can’t afford to contribute much, every dollar counts.

If Vi continues to make these additional contributions to her super throughout her working life, she is likely to be $118,000 better off by the time she retires.

Even if you can’t afford as much as Vi, every dollar you contribute in your early 20’s could equate to $5 or $6 in your 50s because of compound interest!

It’s super easy to make super contributions.

As long as your super fund has your Tax File Number, there’s not much more paperwork involved to make personal voluntary contributions.

It works no different to paying a bill or transferring money. Most funds accept payments by BPAY®, EFT and direct debit, so you can do it in less than a few minutes.

You’ll be taxed way less for investing in your super than other investments.

You may be tossing up investing in stocks or property to get some extra long-term earnings.

If you’re playing the long game, why not invest in your super?

Your investment earnings outside of super can be taxed up to 45% depending on the ownership and type of investment.

Compare this to the 15% maximum tax rate you’ll pay in super investment earnings. That’s a heck of a lot less.

You can also claim tax deductions for personal contributions.

It’s time to get savvy with your super!

Header image: cottonbro via Pexels

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