Super Toolbox
Grow your super
Planning to have enough for a comfortable retirement can be daunting. The sooner you plan, the more likely you are to achieve your retirement goals. Superannuation is widely regarded as the most efficient and tax effective way of investing for your retirement. In most cases, your employer is required to pay Superannuation Guarantee (SG) contributions of 9 per cent of your salary into a complying superannuation fund. You may want to consider whether this will be enough to fund your retirement goals.
You should weigh up the benefits of extra superannuation against your other financial priorities. Contributing a little extra to your super account now could boost your end retirement benefit significantly. The key is to take advantage of compound interest (interest on interest) by starting early. The example below shows the power of extra contributions and compound interest over time.
Paul is 30 years old, earns $40,000p.a* and plans to retire at 60. He is concerned about whether he will have enough for retirement. If Paul has a super account balance of $50,000 and relies on his 9% SG contributions, he will have $328,119 when he retires. However by making a voluntary contribution now of just $200 a month to his super, Paul would have $434,382 for his retirement- that's over $106,200 more! |
MTAA Super can help you increase the amount you receive upon retirement through:
- Salary sacrifice (pre-tax or concessional contributions)- you may reduce your tax bill
- Voluntary contributions (after- tax or non-concessional contributions)- you may receive a government co-contribution
- Spouse contributions- there could be tax benefits
*Assumptions: The above example is based on a yearly crediting rate of 7% and includes the government co-contribution and a yearly contribution increase of 3%, consistent with inflation. SG and monthly additional contributions are made at the end of each month and government co-contributions are made at year end.