Small steps, big results for your super

Put a little extra into your super every payday.

Why? Because putting in small amounts now will make a big difference later to the quality of life you have when you stop working. The sooner you start, the better off you will be.

Types of contributions

Basically there are two types of contributions you can make to boost your super.

Type About How to make
1. Salary Sacrifice These are contributions you make from your before-tax salary. Payroll deduction
2. After-tax (personal) These are contributions you make into your super from your after-tax salary (take-home pay). Choose from either regular after-tax contribution or a one-off payment that suits your financial circumstances. Payroll deduction
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By putting in regular, small before or after-tax contributions, you can boost your super balance – without seeing a huge difference in your take home pay.

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Tax deductible personal contributions

From 1 July 2017, tax deductions for personal contributions are no longer limited to individuals who are self-employed or substantially self-employed. This means that you can obtain a tax deduction for personal contributions you make, provided you meet other eligibility criteria. For more information about the eligibility criteria go to ato.gov.au

If you plan to claim a tax deduction for your contributions, it is important you complete and lodge with GuildSuper in the required timeframe a Notice of intent to claim or vary a deduction for personal super contributions (NAT 71121) available from ato.gov.au. This notice must be acknowledged by GuildSuper to be effective. Contact GuildSuper and we will take you through what is required.

Personal contributions for which you obtain a tax deduction are also subject to the work test and the concessional contributions cap. You can only make personal member contributions if you have provided us with your Tax File Number.

GuildSuper values your loyalty and never wants you to leave and go to another fund. But if you do have to go, then make sure you complete the Notice of intent to claim or vary a deduction for personal super contributions (NAT 71121) form and send that to us before we process your rollover to the other fund or close your account. That way we will make sure your personal contributions are recorded as concessional contributions.

Government co-contribution is like free money

The Government Co-Contribution scheme is designed to help boost your super.

If you earn less than $51,021 p.a. and make an after-tax contribution to your super account, then you could receive "free money" from the Government of up to $500 per year.

It's paid directly into to your super account (some conditions apply). The size of the payment reduces as your total income increases.

Want to know more? Go to the Free Money page.

Spouse contribution

If your spouse earns less than $40,000 per annum, then a spouse contribution can be a tax effective way to boost their super. Spouse contributions involve making payments into a spouse's super account.

The benefits of doing this can include a tax offset of up to 18% for the individual making the payment and increased super savings for the individual receiving the payment.

For more information regarding the tax offset rules visit the ATO website

Download a Spouse contribution form now.

Limits on contributions

There are limits (called contribution caps) on the amount of money that can be put into your super each year. Depending on the type of contribution you're making, different limits apply.

Cap on before-tax contributions

For the 2017/18 financial year, the cap on before-tax contributions (also referred to as the concessional contribution cap) is $25,000 p.a. for everyone (subject to indexation). If you put in more than this amount, then you may have to pay extra tax. Remember this cap includes your employer SG, salary sacrifice contributions and any personal contributions for which you claim a tax deduction.

From 1 July 2018, if you have a total superannuation balance of less than $500,000, and you have an 'unused' portion of the concessional contribution cap for the previous financial year, then you may be able to contribute more than the concessional contribution cap for the current financial year.

'Unused' concessional contribution portions are available for a maximum of five years, after which they will expire.

Cap on after-tax contributions

For the 2017/18 financial year, the cap on after-tax contributions (also referred to as the non-concessional contribution cap) is $100,000. These include any spouse contributions.

If you are under age 65, then you can contribute more than $100,000 for the 2017/18 financial year, provided you do not contribute more than $300,000 over a three year period. This is referred to as a 'bring forward' arrangement.

From 1 July 2017, if your 'Total Superannuation Balance' in all your super funds adds up to more than the 'General Transfer Balance Cap' of $1.6m (calculated at the end of the previous financial year), then you will not be able to make any more non-concessional contributions into super.

For more information on caps call our Member Service Team on 1800 060 215 and ask to speak to a financial adviser.

 
 

Why put a little extra into your super?

Your employer is required to put 9.5% of your ordinary time earnings into your super. This is known as the Superannuation Guarantee (SG) contribution.

Just getting the SG contribution may not be enough for you to build a big enough super balance to enjoy the lifestyle you want when you stop work. You may have to put in a little extra yourself.

Why you need super

Do you want a modest or comfortable retirement lifestyle?

The Association of Superannuation Funds of Australia (ASFA), a leading industry body, explains how much retirees would need to spend per year to be able to enjoy either a modest or a comfortable lifestyle.

A modest retirement lifestyle is considered better than the Age Pension, but still only able to afford fairly basic activities. According to ASFA, to live a modest retirement lifestyle, singles would need $23,767 a year and couples would need $34,216 a year in retirement income.

A comfortable retirement lifestyle enables a healthy retiree to be involved in a broad range of leisure and recreational activities and to have a good standard of living through the purchase of such things as; household goods, private health insurance, a reasonable car, good clothes, a range of electronic equipment, and domestic and occasionally international holiday travel. According to ASFA, to live a comfortable retirement lifestyle, singles would need $43,062 a year and couples would need $59,160 a year in retirement income.

Source: ASFA Super Guru

Tight budget? Here’s how to find that little extra

If you are living on a tight budget, then it can be hard to find an extra $10 a week or $20 a week to put into your super.

Try our Small Change Big Savings calculator. It shows how small changes in your day-to-day spending can produce long-term estimated savings in today’s dollars.

Next ...

  • Get advice from GuildSuper about contributions. Call 1800 060 215 - it will cost no more than a few minutes of your time
  • Play with our Personal Retirement Planner and see the difference a little bit makes
  • Start putting in a little extra today

Check you’re on track with our retirement planner

 

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