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How to break the super glass ceiling

Different work patterns and incomes mean that Australians don’t end up with the same super balances when they retire. That’s why the Government has made changes that could give Australians with interrupted work patterns more flexibility to boost their retirement savings.

Women’s economic security in retirement is the focus. As it stands, the average super balances at retirement are $270,710 for men and $157,050 for women.1

One of the changes involves more flexible rules around super contributions for those who take time out from the workforce.   But when it comes to your future financial security, you don’t need to wait for change to happen. There are steps you can take now.

The first step – don’t underestimate what you can do for your own financial wellbeing

ASIC’s MoneySmart superannuation calculator could give you an idea of where you stand now by letting you work out how much super you’ll have when you retire.

Claim your lost super

You might have super lying around in forgotten super funds if you’ve had more than one employer. You can find and claim it by using the Australian Taxation Office (ATO)’s myGov portal.

Avoid unnecessary super fees

You may want to consider bringing all your super into one fund to avoid multiple administration fees chipping away at your retirement savings.2

Add more to your super

“Super is generally taxed concessionally, making it a great investment,” says Meaghan Noble, Commonwealth Bank’s Executive Manager Women and Advice, who recommends knowing your options and getting advice to make sure you choose the right strategies for you.

Your options include:

  • Salary sacrifice – this can be a relatively simple yet effective way to give your super a boost.3
  • After-tax contributions – these come from after-tax money for which you don’t claim a tax deduction. These contributions are tax-free if you stick to the contributions limits.
  • Spouse contributions – this is where one spouse puts after-tax money into the super of a non-working or low-income earning spouse, and may receive a tax rebate.
  • Splitting contributions – this is where concessional (before-tax) contributions are re-directed to a spouse’s fund in subsequent financial years. You can find out more at the ATO website.

Interruptions to your work patterns during your life can put you at a disadvantage when you want to retire.  You can lessen the impact by being proactive with your super and using the super rules to your favour throughout all the stages and phases of your life.  If you are keen to put strategies into place, contact us today to speak to one of our qualified Financial Advisers.

1 Association of Superannuation Funds of Australia (ASFA)’s SuperGuru website, superguru.com.au, accessed 8th October 2018.

2 Before bringing your accounts together you should consider fees, loss of insurance cover you may hold, costs for withdrawing from your other super funds and any investment or tax implications.

3 If you earn over a certain amount.

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