Consider salary sacrificing
If you’re working, check whether your employer supports salary sacrificing arrangements. Salary sacrificing is when your employer pays part of your before-tax income straight into your super account, on top of the 9.5% super guarantee contributions that they already make for you.
Putting in a little extra each week can make a big difference over the long term. For example, by salary sacrificing an extra $10 per week of before-tax income, a 30 year old on a salary of $45,000 could save an extra $16,165* by retirement at age 65.
How does it apply to me?
If you're 25
- earn $40,000/year
- plan to retire at 65
If you want to salary sacrifice $10/week ($520 annually) and have a $10,000 super balance
If you're 30
- earn $45,000/year
- plan to retire at 65
If you want to salary sacrifice $10/week ($520 annually) and have a $15,000 super balance
Things you should know
1 The ATO defines a spouse as another person (of any sex) who:
- You’re in a relationship with, registered under a state or territory law; or
- Although not legally married to you, lives with you on a genuine domestic basis in a relationship as a couple.
If you’re in a relationship and have made contributions under the threshold to your spouse’s super fund or retirement savings account (RSA) during the financial year, you may be entitled to a spouse contribution tax offset if your spouse was under 75 at the time the contribution was made.
From 1 July 2020 your spouse must be under 75 years old (prior to 1 July 2020 your spouse had to be under 70) to receive a spouse contribution. Your spouse’s income must also be less than $40,000. Refer to the ATO link for more details. Learn more.
Colonial First State Investments Limited ABN 98 002 348 352, AFSL 232468 (CFS) is the issuer of interests in Commonwealth Essential Super ABN 56 601 925 435 (Essential Super) and is a wholly owned but non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124 (Bank). This document may include general financial product advice but does not consider your individual objectives, financial circumstances or needs. You should read the Product Disclosure Statement (PDS) and the Reference Guide for Essential Super carefully and consider whether the information is appropriate for you before making any decision regarding this product. Download the PDS and Reference Guide, or call us on 13 4074 for a copy. The Bank and its subsidiaries do not guarantee the performance of Essential Super and an investment in this product is subject to risk, loss of income and capital invested. An investment in Essential Super is via a superannuation trust and is therefore not an investment in, deposit with or other liability of the Bank or its subsidiaries. Where we mention ‘we’, ‘us’ or ‘our’, we mean CFS.
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. Colonial First State Investments Limited 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.