Getting your super back on track

Money and Life
(Financial Planning Association of Australia)


If you experienced financial hardship in 2020, you may have decided to withdraw from your superannuation balance to tide you over. Find out what you can be doing to top up your super and keep your retirement savings on track.

In 2020, the Federal Government announced a number of different types of support for Australians in financial difficulty due to the COVID-19 pandemic. For people who lost their jobs or were managing on reduced income, withdrawing up to $10,000 from their superannuation balance in the 2019/20 and 2020/21 financial years was one of their options for staying on top of their finances.

If you were one of thousands who dipped into their super to make ends meet, it’s important to be aware of how it could make a difference to your future retirement savings. The Moneysmart website has a retirement planner calculator you can use to forecast how much you’ll have at retirement based in your current balance and contributions. It can also help you estimate how much more you’ll have if you invest extra into your super, starting now.

Here are five strategies to think about to get your super back on track as part of your plan for a secure retirement:

Put any spare money into super

With the Moneysmart calculator, it’s easy to see how much of an impact it can have when you add as little as $10 a week extra into your super. If you can do this 20 to 30 years before you retire, compound interest will work its magic to build up your retirement nest egg over time. If you can manage to commit to even a small regular personal contribution to your super, on top of Super Guarantee (SG) payments from your employer, it’s going to make a positive difference to your retirement income in the future.

Salary sacrifice

You can make extra payments into your super fund in a few different ways. These payments are called personal or voluntary contributions and salary sacrifice can be a very tax-effective way to top-up your super from your income. Salary sacrificing into super means paying an amount from your pre-tax salary into your super fund. Up to a certain amount, these extra contributions are taxed at a rate of 15%. If you’re currently paying a higher marginal rate of tax on your income, you’ll save on the amount of tax you’re paying.

There are annual limits on pre-tax super payments (also called concessional contributions) and this includes the SG payments made into your super fund by your employer. If you go over these limits, you may have to pay more tax at the end of the financial year.

Find out more about different types of super contributions and limits.

Make the most of a windfall

If you come into money from an inheritance, or have a lump sum from a tax refund or sale of asset such as your home or car, think about putting some of it towards your super. As with salary-sacrifice, it’s important to be aware of how an extra one-off contribution will affect your tax liability so check our super contributions guide for more on the annual caps that apply.

Spouse contributions

If your spouse or partner is still earning, and you’re not, they can help you grow your super. Many super funds allow you to split your contributions – including compulsory payments from your employer under the SG – with your spouse (married or de facto). If your spouse isn’t working or is earning a low income, you may also be entitled to a tax offset  of up to $540 for these contributions into their eligible super fund.

Visit the ATO website to find out more about the tax offset for contributions made to super on behalf of your spouse and determine whether you’re eligible.

Look at your super options

Not all super funds are the same and there are many different investment options within every super fund. When it comes to maximising your super savings for retirement, how much you’re paying in fees and the investment return you’re getting will both affect the outcome. So it’s important to spend time looking at your options across different funds and types of investments and make choices that work for your life stage and goals. This is where expert financial advice can help you in getting to know your options and understanding what works for your own situation.


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