Tips and tricks to boost your superannuation

Did you know women retire with an average of 42 per cent less super compared to men?

That's according to Australian Super's 2020 Future Face of Poverty is Female report.

The usual culprits (think the gender pay gap, time off work and the jobs women are more likely to work) are to blame.

A lot needs to change structurally for this to stop happening. But there's still plenty you can do as an individual.

So we asked independent financial adviser Jacie Taylor and financial adviser Kate McCallum for the lowdown on some of the options out there.

Before we get stuck in, claps for everyone who's made it this far. Bringing yourself to think about super can be hard, but your future self will thank you.

1. Shop around for a good fund

First things first, Ms McCallum says you should make sure you only have one super fund so you're not paying extra fees.

"If you go to your [chosen] super fund and ask them to help you consolidate, they do the work for you," she adds.

The next step is making sure the fund is performing well and has reasonable fees. It can make a huge difference to the amount you have when you retire.

Comparing different super funds can be tricky, but the federal government has released a new comparison tool called YourSuper which can be accessed via the Australian Taxation Office (ATO) service in your MyGov account.

There are some important considerations to make before switching funds, such as insurance cover, so it's important to do your research.

As for what you should look for in a fund?

"You want to focus on the fees you pay and the asset class: this is whether you're invested in shares, property, infrastructure, bonds or cash," Ms Taylor says.

"If you're in your 20s, 30s or 40s, you're going to want to be invested really aggressively. That means there will be volatility, but over the long term it's going to grow so much more."

Ms Taylor says Australians typically pay super fees of about 1.1 per cent. The lower, the better.

"Phone your superannuation fund and say to them, 'Tell me every single fee that I'm paying: membership fees, administration fees and investment fees,'" Ms McCallum advises, explaining the investment fees listed in super fund product disclosure documents are as crucial as the ones found on your super statements.

She recommends checking in on your super at least every quarter to make sure you're not paying unnecessary fees and that any employer and personal contributions are showing up.

2. Consider salary sacrificing

When you salary sacrifice into super, it reduces your taxable income so you generally end up paying less tax overall.

Salary sacrificed super contributions are taxed at 15 per cent, which will be less than your marginal tax rate if you have a job earning more than $45,000 per year.

The maximum amount you can sacrifice to super is capped at $27,500 a year, and this includes any mandatory contributions made by your employer.

Some things to keep in mind?

"[Because] you can't get at [this money once it's sacrificed] … it really needs to be money that you're happy not to have the use of for many years," Ms Taylor explains.

Some small businesses don't offer this. Others might but there might be a charge to set it up, she adds.

If you're interested, ask your payroll department if they offer salary sacrificing, then tell them how much you want to sacrifice and they should do the rest for you.

3. You can make a lump sum contribution

Another option is to make a lump sum contribution to your super and claim a tax deduction. 

It's often as simple as contacting your super fund and arranging a BPay or bank transfer.

You will need to notify your super fund that you are intending to claim a deduction. Most funds have a form you'll need to fill out, otherwise there's a generic form available from the ATO.

Your super fund will take 15 per cent of that amount out for tax, and then when you're doing your tax return, you can claim a tax deduction and end up with a bigger refund, Ms Taylor explains. 

This method does require more willpower but you could use a roundup savings app or set up a dedicated account to help you save.

Ms Taylor says one disadvantage to this approach is that you don't get the tax savings until you submit your tax return. When you salary sacrifice, the tax saving is applied straight away.

4. Consider your life insurance needs

There are three parts to insurance through super, which you can read more about on Moneysmart.

"Insurance is really important, but not everybody needs the same level and not everybody should have their insurance through super," Ms McCallum says. 

Both experts say it's important to consider income protection insurance, which would cover you if something happens and you can't work.

Then there's death insurance and total and permanent disability (TPD) insurance, both of which are lump sum payments.

Again, TPD can be important for financial security or peace of mind. As for the death cover?

"If there's nobody depending on you, then you don't need it, and if you don't need it you shouldn't be paying for it," Ms McCallum says.

That said, Ms Taylor explains TPD and death cover are often linked — so it can be hard to get one without the other.

5. The super boost for low-income earners

This one's for low and middle income earners.

If that's you, for every dollar you put into super, the government will put in 50 cents, up to a maximum of $500 each financial year.

To be eligible for the full $500, you'll need to make a personal super contribution of $1,000, earn less than $41,112 and meet the eligibility requirements for the scheme. 

The best bit? You don't need to apply. Importantly though, you can't claim a tax deduction for your personal contribution when using this scheme.

When you lodge your tax return, the government automatically works it out and drops that sweet cash boost into your super for you.

6. Spouse contributions may be eligible for a rebate

This is another one for low income earners making less than $40,000 a year.

If this is you, and you have a spouse, and they put money into super for you, they can get a rebate of 18 per cent up to a maximum of $540.

"The magic number is $3,000 as a spouse contribution. If you earn less than $37,000, then you get the full $540," Ms McCallum says.

"Ideally, you'd throw that in super as well."

Head to the ATO website for more information on this scheme. 

This article contains general information only. It should not be relied on as advice in relation to your particular circumstances and issues, for which you should obtain specific, independent professional advice.