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Extra payments into super, no matter how tiny, can do a lot for your balance. It doesn’t have to be a regular amount or a big lump sum to make a difference.
Watch (3:30 minutes)
Watch (3:30 minutes)
For the cost of a coffee a day, you could make a big difference to your future wealth. Gen from the IOOF team reveals what just $25 a week can do for your super.
Putting money away for spending in 10, 20 or 30 years’ time is a lot to ask. But apart from having more income to look forward to in retirement, there are other incentives to get you saving a little more into super.
Here are five great reasons to save just a little bit into super, starting right now:
Saving for retirement shouldn’t mean going without now so you can have more to spend later. But it’s also important to get the balance right between enjoying quality of life while you’re still earning and in the future when you’re not. Putting even a little extra into super can help you meet your savings goal for a comfortable life in retirement.
So it’s well worth weighing up whether $4 for one more take-away coffee each week is worth it compared with the extra $20 you could be putting into super each month. That’s $240 a year and around $10,000 during your working life. And with the magic of compounding that $4 a week could see you a lot better off by the time you retire.
Helping yourself with extra super payments can also see you get help from the Government. If you’re on a low income, you’ve got two ways to make payments into super and have the Government put more money into your super fund.
By saving into super instead of a regular savings account, you have the freedom to choose how your money is invested. Particularly when interest rates on regular deposits and even term deposits in the bank are low, investments can offer you the potential to earn more from your savings, depending on the type of investments you pick.
We’ll be exploring this all in more detail in another topic, how do you choose where to invest your super? This is where you can get to grips with some investing basics and find out more about what’s involved when you’re choosing super investments.
If you stop earning for a while, super guarantee contributions from your employer are on pause too. You might take time off to travel or study, or care for kids or other family members. But this is a time when even a small break in you super contributions can have a big impact later on. This is why the Government offer to chip in and help out with your retirement savings when your paid income is lower or non-existent and you still manage to make extra payments into super.
If you’re one half of a married or de facto couple and taking time off from paid work, there’s another way to make sure your super doesn’t suffer a setback. Your partner can make some additional contributions for you to keep your balance growing and as a way for you to benefit from extra help from the government. And if you’re the one helping out your spouse with their super savings, it can put money back in your pocket too. Making a spouse contribution could mean you’re eligible for a tax offset of up to $540 less on your tax bill for the year.
The Government pays a tax offset straight into your super account if you or your employer makes salary sacrifice or SG super payments (before-tax) and you earn less than a certain amount of income.
Depending on your income, if you make a one-off or regular after-tax payments into super, you could be eligible for a Government payment towards your super.
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