Smarter Super - Invest in your future and make the most of your retirement
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Important Notice

This booklet gives information of a general nature and is not intended to be relied on by readers as advice in any particular matter.

You should consider consulting a financial adviser regarding how this information may apply to your own circumstances.

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For most of us, superannuation will be our main source of retirement income. Decisions you make now regarding your super can make a considerable difference to what you receive as your final benefit.

There are lots of clever ways you can maximise your super. Some depend on your personal circumstances and may be quite complicated – it’s best to speak with a financial adviser.

Here are four relatively simple suggestions to boost your super:


You may have super in an account that you have forgotten about. The easiest way to search for your lost super is using the Australian Taxation Office's online search tool SuperSeeker at You'll need your tax file number to conduct a search. SuperSeeker looks for any lost super you may have and instantly provides you with potential matches. Being able to find lost super is another reason to give your fund your tax file number, as it provides a valuable link between you and your super. Some funds also run searches for lost super on their members' behalf from time to time.


If you are like many Australians, you probably have more than one super fund. Perhaps you've accumulated a few fund memberships over the years as you changed jobs or even while you worked part-time. Consider putting your money together in one super fund to streamline your super so you're not receiving several different statements and not paying several sets of fees.

Did you know?

Some super funds offer members financial planning seminars or other sources of financial advice to help them maximise their super. Check with your fund to see if this is available and, if so, take advantage of it.

Having fewer points of contact for your super also makes things less complicated. Not only can combining super funds give you more control over your investment strategy and your paperwork, it could also mean there is less chance you'll lose track of your super later on. Most funds have a standard form you can fill out to provide consolidation instructions and they will organise to roll-over your money into your selected fund. Some funds provide consolidation services to assist you.


Before you consolidate your super or move your super from one fund to another, check whether the fund you are leaving charges any fees and whether you will lose any valuable benefits or insurance cover. Make sure you won't be left without insurance during the transition. For more information, take a look at the 'making an informed choice' tips by clicking here.




The compulsory 9% employer contributions to your super might not result in the retirement income you want. Your super balance might seem like a lot of money but once you consider the effects of inflation and the fact your money might need to last you 20 or 30 years in retirement, you might get a bit of a shock. Many people also have longer breaks from the workforce throughout life than they expect, so this limits the size of their superannuation since contributions may stop for a while.

Consider contributing extra money to superannuation, in addition to what your employer puts in. You might also think about making contributions on behalf of a lower-income spouse or a spouse with less super. You can make contributions to superannuation or have contributions made on your behalf until you are aged 65, regardless of whether you are working or not.

Tax advantages of superannuation make it a very attractive way to save for retirement. It's usually more beneficial to invest for retirement through super than to make identical investments outside superannuation. And now there are no limits on the amount of final superannuation benefit you can take on a concessionally taxed basis, the more you have in super, the merrier your retirement. Another reason to gradually put extra into super earlier is there are now caps on how much you can contribute to super each year on a concessionally taxed basis. For more infromation about contribution caps, click here.

So you can't leave it until close to retirement and expect to suddenly contribute a very large amount to your super in one go. For more information on the tax advantages of super, click here.

There are two ways you can contribute more to your super:

After tax

  • You can contribute into a super fund using your money which has been subject to income tax already.

Before tax

  • You can arrange with your employer to take less in your pay packet in exchange for them putting pre-income tax money into your super. Because super is taxed at less than most marginal tax rates, this 'salary sacrifice' arrangement means you get more money going into super. You could also reduce your income tax.


If you are interested in salary sacrificing into super, check if your employer allows it and speak with a financial adviser to see if this strategy is right for your situation.

Remember that annual caps apply to what can be put into super on a concessionally taxed basis. For more infromation about contribution caps, Click here.


‘Salary sacrificing’ is where you choose to give up gross salary or wages and arrange with your employer to contribute the ‘sacrificed amount’ into your super fund. This may reduce your assessable income for taxation purposes. It will also boost the amount of money you have working for you because when it is put into super it is taxed at only 15%, rather than your marginal tax rate.


Consider asking your employer to put any pay rises, tax cuts or bonuses into your super fund. Because you keep your take home pay the same, there's no compromising on your current lifestyle. This can potentially reduce your income tax and you’ll also benefit from the power of compounding on your super balance, giving you more for your retirement. But keep a close eye on your contributions so you don’t accidentally go over the contributions cap and have to pay tax on those excess contributions.



There are compelling reasons to make additional personal contributions to super from your after-tax money. You might have money available to contribute which is not directly from your pay packet so can't be salary sacrificed. Or your employer might not allow you to salary sacrifice. Or you might want to take advantage of the Government’s Super Co-contribution initiative. By making after-tax contributions you could access up to an additional $1,500 a year. By making after-tax contributions on behalf of your low income spouse you could also get an 18% tax offset worth up to $540 a year. For more information about the Government’s Super Co-contribution initiative, click here and about spouse contributions, click here.



From 1 July 2007, caps apply to the amount of contributions that can be made to superannuation each financial year on a concessionally taxed basis. If you contribute amounts beyond the contribution caps, the excess contributions will effectively be taxed at the top marginal tax rate plus Medicare levy.

Concessional contributions cap:

  • This cap includes the compulsory 9% employer contributions, employer notional defined benefit contributions, amounts you salary sacrifice, and contributions you make if you are self-employed and claim a tax deduction. Contributions are capped to $50,000* per annum. Under transitional arrangements, if you are at least 50 years of age, the limit is higher at $100,000 per annum until the end of the 2011/12 financial year.

Non-concessional (after-tax) contributions cap:

  • This cap includes contributions you make yourself using after-tax money. Contributions are capped to $150,000** per annum. If you are less than 65 years of age, you can ‘bring forward’ another two years worth of non-concessional contributions, allowing you to contribute up to $450,000.

* The $50,000 threshold is indexed to Average Weekly Ordinary Time Earnings (AWOTE) but will only increase once the indexed amount is greater than $5,000.

** This threshold will not be indexed but will remain at three times the level of the cap on concessional contributions and will increase as that cap moves with indexation.



Christine has decided that from her 45th birthday onwards she will commit to a disciplined savings plan for her retirement. After reviewing her budget, she knows she can commit to saving an additional $3,000 a year from her take home pay packet. Christine already has some money in a super fund, so was thinking of complementing this with making some extra savings outside of superannuation.

Christine talked with her financial adviser about her goals and was surprised to find out she could end up with more than $100,000 extra savings at age 65 if she ‘salary sacrifices’ into super, rather than puts money into an investment outside of superannuation.

Because Christine is on a marginal tax rate of 41.5%, including the Medicare levy, by arranging with her employer to forgo $3,000 from her take home pay packet, this actually equates to $5,128.21 before tax. So she gets more money working for her in the tax advantaged environment of super.


Christine's 20 year saving projections

*Assumptions: Christine has $3,000 per annum after tax to invest in a non-super investment, or $5,128.21 before tax to invest via salary sacrifice to her super fund (assumes a marginal tax rate of 41.5% including Medicare levy).
In both options, investments are made into a balanced fund with after-fees annual returns of 4.38% (24% franked) income and 3.75% growth. The level of contributions increase by an assumed Average Weekly Ordinary Time Earnings (AWOTE) rate of 4.0%pa. Future dollars are discounted into today’s terms by an assumed inflation/CPI rate of 2.5%pa.


The compulsory 9% employer contributions are only required to be made until age 70 years.

If you aged under 65 years, you can make contributions to superannuation or have contributions made on your behalf at any time.

From age 65–74 years, those wanting to contribute must have worked at least 40 hours within 30 consecutive days during the same financial year, known as the ‘work test’. You must make a new employment declaration for each financial year that you want to contribute. Spouse contributions can only be made on your behalf if you meet the ‘work test’ and until age 70 years.

Self-employed people and employers contributing for employees can claim a full deduction for super contributions made for themselves or their employees until age 75 years.

Personal after-tax contributions can only be made until age 75 years.



Keep in mind that contributions counted towards the annual caps can add up across your different super accounts and across types of contributions. So you need to keep an eye on your concessional and non-concessional contributions to avoid exceeding the caps and therefore avoid the top marginal tax rate plus Medicare levy.



The Government’s Super Co-contribution initiative allows you to increase your super by making personal contributions from after-tax money. The income thresholds for the co-contribution are indexed annually.

Based on the figures that apply from 1 July 2007, if you contribute money yourself into super from your after-tax income and earn less than $58,980^, you could be entitled to a co-contribution made by the Government to help grow your super. Whether you are an employee or self-employed, if you meet certain criteria, this co-contribution could be as high as $1,500. This is an annual opportunity so, providing you meet the criteria, you could receive a co-contribution each year.

To be eligible you generally need to:

  • Make a personal (after-tax) contribution to superannuation
  • Earn less than $58,980^
  • Earn 10% or more of your income from carrying on a business, eligible employment or a combination of both
  • Lodge an income tax return for the year you have earned your income
  • Ensure your super fund has your tax file number
  • Be under 71 years of age at the end of the financial year.

If you meet the eligibility criteria and your income is less than $28,980^, then you may receive from the Government $1.50 for every after-tax dollar you contribute to superannuation up to the maximum co-contribution of $1,500. The maximum co-contribution reduces by 5 cents for every dollar you earn over $28,980^, phasing out completely when earning $58,980^ or more each financial year.

^ Income is your assessable income plus reportable fringe benefits. These income levels are for the 2007-08 financial year. The lower threshold is indexed on an annual basis and the higher income threshold will always be the lower threshold + $30,000.

Your co-contribution is payable after:

  • you have lodged your income tax return
  • your superannuation fund has lodged a member contributions statement for you; and
  • the Australian Taxation Office has received any additional information required.

For more information about the Government’s Super Co-contribution initiative, see

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Did you know?

Your personal after-tax contributions and the co-contribution made by the Government are not taxed when deposited into your super account or when you withdraw them.




As long as you make personal after-tax contributions and meet the eligibility criteria, the co-contribution will be paid in to your super account each year. The Australian Taxation Office has a calculator to help you work out the co-contribution you could be eligible to receive at

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