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As you get closer to retirement the way you manage your super may start to change.

Tip 1: Save on tax by making extra contributions

By law your employer is generally required to put 9.5% of your salary into your super account.

If you choose to make extra pre-tax super contributions (for example salary sacrifice contributions) you may save tax.

Pre-tax contributions into your super are, for most people, taxed at a rate of 15%1, which may be less than your marginal tax rate.

See more information from the Australian Government on contribution caps and thresholds.

Tip 2: Assess your investment strategy

You’ll be starting to get a clearer idea of when you’re likely to retire and how much you’d like to retire with.

Think about your current investment strategy – is it going to get you where you want to be? Or, are you taking on more risk than may be necessary for a comfortable retirement? This could be a good time to engage with a financial planner to explore the pros and cons of different approaches.

Also look into whether you’ll qualify for the age pension. If so, this may take some of the pressure off your super.

Tip 3: Review your insurance coverage and beneficiaries 

Things can change and arrangements you made earlier in life may no longer be applicable. Take a look at the nominated beneficiaries on your super to make sure everything is up to date. You may also want to consider putting in place a binding or non-lapsing death benefit nomination if you don’t already have one. 

You may also want to look at any insurance coverages tied to your super. Are they all still relevant or are there any that you feel should be added?

Tip 4: Consider how you want your super paid

There are various ways you can access your super. Start by figuring out when you’ll reach preservation age.

Then you’ll want to think about what strategy will best suit you, for example you can turn your super into an income to be paid over time or just withdraw a lump sum.

Again, at any stage a financial planner may be able to assist you in finding the best way forward.

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Things you should know

1If your income for these purposes exceeds $250,000, you are subject to an additional 15% tax on an amount of your concessional contributions.  Please see the ATO website for more information on Division 293 tax.

This article contains general advice only. It does not take account of your individual objectives, financial situation or needs. You should consider talking to a financial planner before making any financial decision based on this information. This document has been prepared by Commonwealth Financial Planning Limited ABN 65 003 900 169, AFSL 231139, (Commonwealth Financial Planning) a wholly-owned, but non-guaranteed subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124. Commonwealth Financial Planners are representatives of Commonwealth Financial Planning.

Information in this article is based on current regulatory requirements and laws. While care has been taken in the preparation of this document, no liability is accepted by Commonwealth Financial Planning, Commonwealth Financial Planning related entities, agents and employees for any loss arising from reliance on this document. Commonwealth Financial Planning is registered with the Tax Practitioners Board as a Registered Tax (Financial) Adviser. However your Financial Planner is not a Registered Tax Agent. Consequently, tax considerations are general in nature and do not include an assessment of your overall tax position. You should seek tax advice from a Registered Tax Agent.