How much can I contribute to super?

Can I contribute as much as I like to super?

Yes, and no. While it sounds like a great idea to put money away for the future, the ATO is a little touchy about us all putting loads of money into a place that pays less tax!

Therefore while there is technically no limit to the amount you can contribute to super, if you go above the contribution limits they have in place you may be personally liable for additional tax.

Can I contribute above what my employer pays into super for me?

If you are employed, then there are two way you can contribute extra to super above the 9.5% your employer is generally required to pay into super for you:

• you can ask your employer to deduct extra money from your pay (before tax is taken out) and pay this into your super account - this is called salary sacrificing
• you can contribute using your own savings, which is called a non-concessional contribution, because your don't receive a tax deduction for the contribution. 

What are the limits?

The contribution limits for employees depends on the type of contribution you want to make.

• Concessional contributions have a cap of $25,000 per annum. These contributions include employer contributions and salary sacrifice contributions, amongst others.
• Non-concessional contributions have a cap of $100,000 per annum. These are contributions made out of your own savings. 

Once you have reached age 65, you will need to work at least 40 hours in 30 consecutive days in the financial year should you wish to contribute to super yourself. And once you reach age 75, you aren't able to add to your super yourself. 

What if I go over the limit?

Amounts over the limits are subject to additional tax, so it is a good idea to ensure you will be under the limits before you make any payments.

Does it get more complicated than this?

Absolutely. If you are no longer working, or self employed, or a high income earner, or a multitude of other factors, then the tules around what is possible to contribute into super have more layers than what we have outlined above.

What should I do if it seems more complicated?

First of all, you need to ensure you have sufficient time to get some help and then put things in place. If it is already June and you feel like you have might be a complicated case, then getting it all sorted this financial year may be a big ask.

Secondly, there are a number of places to get more information. You can call you super fund directly to found out how much you have already contributed, or to do more research into what might be possible.

Alternatively you can ask the Caboodle Advice team for assistance. We can help clarify the limits that apply to your specific situation or even provide you with a quote for pulling together a tailored plan of attack on how you can contribute more to super over time to build that retirement nest egg.

To find out more simply give us a buzz at Caboodle Financial Services on 1300 652 944 or click below:

WARNING: I know I don't need to say this, but this information is not tailored to your personal situation. It is designed to be of a general nature and get you headed in the right direction. It therefore hasn't taken into account your personal objectives, financial situation, or personal needs. 

You therefore need to either assess whether it is appropriate to your personal situation on your own, or ask an adviser to provide advice that is tailored to  your personal situation. 

What brickies can teach us about super

Superannuation isn’t exactly one of those words that gets you excited. Usually the first thought when people hear the word is ‘I’ll deal with it later’. For some of us, we won’t be accessing our super for another 30 to 40 years, that’s a lifetime away! When you’re hardcore saving for a holiday or your first home, dealing with super just seems unimportant. Well my friends I am here to tell you it is and it’s easy.

Sorting out your super now is the difference between having ‘smashed avo and fetta toast’ versus beans and rice when you retire. Think about your lifestyle today. Shut your eyes and make a mental list of the regular habits you afford yourself outside of your work.

• Do you buy lunch?
• Do you workout at the gym or play any social sports?
• Do you host dinner parties or have friends around for board game nights?
• Do you like adventuring around the different hotspots where you live?
• Do you love buying certain brands of clothing?
• Do you like to Netflix and chill?

This lifestyle doesn’t end because you get ‘old’. In fact, people often gain a second lease on life when they retire. We all know a grandparent somewhere in our lives who is doing most of the above. Sorting out your super now is crucial to making sure that your lifestyle doesn’t bottom out once you finish work, rather you get to continue living the life you enjoy.

The idea is, you want to build money within your super fund so that you can live off it when you finish working. This is important to address now because there are many things that could be affecting the ‘building’ phase of your super. If you have multiple super funds, that’s multiple sets of fees detracting from your super balance. If it’s invested, it could be invested in a way that is too risky or too safe.

How good does it feel when you actively save money? You feel like an adult who has their life in order. If you haven’t had the experience of saving money, reflect back to a time where you did something that benefited future you. This is what your super is. When you get your next super statement, check out the balance. That balance is a result of you working hard and your employer putting money away for your retirement. Give yourself a high five, go you.

Imagine you're building a brick wall, you build ten bricks high and then someone comes along overnight and takes away two bricks. The next day another ten bricks high and then another two bricks taken away. This goes on for weeks, but you don’t really notice as it’s only two bricks a day. Months have gone buy and you were supposed to have finished the wall and it should have been much much higher by now. Had you have checked in on the first day you could have bopped the brick thief on the head and avoided having a short wall when it was too late. This is just like super, if you address it now you can do things that reduce the bricks being taken away, making sure you have enough when you need it.

So pop on your hard hat and start digging. Here are three things you can do right now to start building your brick wall:

1. MyGov (https://my.gov.au) - Register for MyGov and find where your super is.

2. ASIC MoneySmart (https://www.moneysmart.gov.au) - Read up on the ins and outs of super.

3. Ask for help - Call Caboodle Financial Services on 1300 652 944.

Because dealing with it later, always ends up being too late.

An Interview with Peita D - Our Relationship with Money

Caboodle's Managing Director, Peita D was interviewed late last year about the financial services industry and about the evolution in the way we think about money and finance.

The Interview Series starts as Peita talks about how our relationship with money has changed over time and what that means for the advice we get from a financial adviser.

You can find more videos like this one on our YouTube channel Caboodle TV - subscribe and receive updates as we continually add new ones!​