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Your 30s and 40s can bring big life decisions like starting a family or buying a home. As you make these decisions, make sure your super is on track to help you towards meeting your personal goals for the future.

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%, which may be less than your marginal tax rate.

See more information from the Australian Government on contribution caps and thresholds.1

Tip 2: Review insurance options

If your family situation changes you may find you want to increase your level of insurance cover.

Most super funds offer death cover, total and permanent disability cover and income protection for their members, paid out of the money in their super account.

Getting insurance through your super can be a cost effective way to get coverage if you think this is something you need.

It’s important to read through the Product Disclosure Statement (PDS) closely so you know exactly what you’re getting.

You should also be aware of new laws that require trustees to cancel your insurance in certain situations if you don’t make a written election to maintain your cover. This applies where:

  • your super account becomes inactive (i.e. the fund hasn’t received a contribution or rollover in a continuous 16 month period)
  • your superannuation account balance is continuously less than $6,000 after 1 November 2019 (and whose account has never reached $6,000 or more after 1 April 2020) or
  • you join the fund on or after 1 April 2020 and you are under the age of 25.2

Tip 3: Consider a binding/non-lapsing nomination

A binding or non-lapsing death benefit nomination instructs your super fund which of your eligible beneficiaries to pay your death benefit to if you die.

Consider setting one up and also make sure you keep it up to date if your circumstances change.

Tip 4: Consider making contributions into your spouse’s super account

Depending on your circumstances, there may be some tax benefits to making contributions into your spouse’s super account. Look into whether this will work for you.

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Things you should know

1 Contribution caps apply - if you exceed the cap you may have to pay higher tax.

2 Protecting Your Super measures commenced on 1 July 2019, which require superannuation trustees to cancel insurance where:

- the member’s superannuation account has not received any rollovers or contributions for a continuous period of 16 months, and the member has not elected to take out or maintain insurance.

Remember, before you make a decision about your super, you should compare the costs, fees, risks and benefits of super funds. It makes sense to consider whether you can replace any insurance cover you may lose when you bring your accounts together, as well as any costs for withdrawing from other super funds and any investment or tax implications.

This article is intended to provide general information only and does not take into account your individual objectives, financial situation or needs. Taxation considerations are general and based on present taxation laws and may be subject to change. You should seek independent, professional tax advice before making any decision based on this information. The Commonwealth Bank is also not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and you should seek tax advice from a registered tax agent or a registered tax (financial) adviser if you intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law. Information in this article is up to date as at the date of publication.