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.
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.
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.